Moving in together - mortgage arrangements

ptben

My girlfriend and I are buying a house together and I would like some advice on how we set up the sharing of mortgage payments. Simply:

House purchase price is £156k

Girlfriend is putting in £78k from the sale of her old house

I have applied for a mortgage for the other £78k based purely on my income.

However, the total cost of the property once the mortgage is paid off will be

£78k cash + £78k mortgage capital + £mortgage interest.

Question: should the mortgage interest be shared between us or should I pay it all as I've had to borrow the money and she hasn't. I'm inclined to think the latter

Jacka87

Thats a good point, however if you are a serious long term couple then is it not a case of whats mine is your etc?

Anyway I had another option that may be possible. She could re-mortgage her current property to raise her half of the cash. She could then let it out and hopefully pay off the mortgage. You would both then be responsible for a 75k mortgage however her half would be getting paid by the tennant. Assuming this all works fine, (ie) dont do it if as a couple you cant cover both parts of the mortgage if the rental income stops for a bit, then you will be left with 2 properties with her old place being an investment, considering the current house price situation you could either wait 5yrs or so when the prices are higher and sell for more than 75k or you could keep it there as a long term investment?

beecher

I think the mortgage payment should be split in half personally - your gf couldn't afford to live in a £156k house if you weren't in this together, so surely she should be paying her share?

ptben

Jacka87 wrote: »

Thats a good point, however if you are a serious long term couple then is it not a case of whats mine is your etc?

Anyway I had another option that may be possible. She could re-mortgage her current property to raise her half of the cash. She could then let it out and hopefully pay off the mortgage. You would both then be responsible for a 75k mortgage however her half would be getting paid by the tennant. Assuming this all works fine, (ie) dont do it if as a couple you cant cover both parts of the mortgage if the rental income stops for a bit, then you will be left with 2 properties with her old place being an investment, considering the current house price situation you could either wait 5yrs or so when the prices are higher and sell for more than 75k or you could keep it there as a long term investment?

Unfortunately, her old property has already been sold as it was part of a divorce settlement. Would have been a good idea to rent it though.

ptben

beecher wrote: »

I think the mortgage payment should be split in half personally - your gf couldn't afford to live in a £156k house if you weren't in this together, so surely she should be paying her share?

This would then be represented as a 75% / 25% ownership of the property with her owning the 75%?

Jacka87

I thought there may have been some reson for her selling the property. May have been a really good idea but still.

I dont really agree with the fact that you feel she would own 75% of the property though, if you split up and she had a good lawyer then maybe you would be right. However if you stay together then there is no problems. As previous whats yours is hers etc?

I would say though if you are happy to pay all of the interest, do remember that you benifit from a 156k property for a 78k mortgage then why not just pay the interest on your own. That way if the relationship breaks down its really easy to sort it out as you both have a 50-50 split. If you stay together then she saves loads of money and therefor will be duty bound to take you a long and expensive holiday!

ptben

Jacka87 wrote: »

I thought there may have been some reson for her selling the property. May have been a really good idea but still.

I dont really agree with the fact that you feel she would own 75% of the property though, if you split up and she had a good lawyer then maybe you would be right. However if you stay together then there is no problems. As previous whats yours is hers etc?

I would say though if you are happy to pay all of the interest, do remember that you benifit from a 156k property for a 78k mortgage then why not just pay the interest on your own. That way if the relationship breaks down its really easy to sort it out as you both have a 50-50 split. If you stay together then she saves loads of money and therefor will be duty bound to take you a long and expensive holiday!

Sounds like the easiest setup :beer: