Splitting up - joint mortgage

Dan29

There are quite a few threads on this board about couples splitting up but I can't seem to find the answer to this:

My girlfriend and I have split up and one of us will be moving out and renting. For various reasons it seems best to continue jointly owning the house, at least until the fixed rate on the mortgage expires in a couple of years.

The joint mortgage is £800 a month, repayment. Everything is and always has been 50/50. My question is, how much should each of us - one living in the house, one not - pay towards the mortgage?

Thanks
Dan

opinions4u

Dan29 wrote: »

There are quite a few threads on this board about couples splitting up but I can't seem to find the answer to this:

The joint mortgage is £800 a month, repayment. Everything is and always has been 50/50. My question is, how much should each of us - one living in the house, one not - pay towards the mortgage?

The reason you can't find the answer is because there are no precise rules in place to decide.

From the mortgage lender's point of view, they just expect the payment to be made. If one of you doesn't pay they will pursue the other for the money. If neither of you pay they will pursue both of you through the courts to a repossession that will affect you for longer than a decade.

Personally I think both of you should take legal advice or find a cheaper arbitration service locally. You need to put in to place clarity over:

1) Who pays what (it would seem to be fair that the person remaining in the house pays more, but that isn't a given as everybody's circumstances are different).

2) Who receives what when the house is sold? If, for example you paid the whole mortgage for the next 2 years and then sold the house increases by £20k, does that £20k get split 50/50 or should you get more/all of it? Similarly, what happens if the house falls in value?

3) Who pays council tax and other bills?

4) What would happen if one or the other of you gets a new partner?

5) What should happen if either of you suffers a drop in income and can't maintain any agreement that you make?

If you can come to an agreement between yourselves without the solicitors, which would save you a fair sum, and then get a solicitor to put such an agreement in writing, this should provide the platform to get on with your lives.

Even then, there is the risk that one party or the other may break the agreement. This risk is probably fairly high and to enforce it would involve expensive court costs.

To be honest I'd pay the penalty and sell the house. Make a clean break and get on with enjoying life.

Dan29

Thanks opinions4u.

opinions4u wrote: »

The reason you can't find the answer is because there are no precise rules in place to decide.

From the mortgage lender's point of view, they just expect the payment to be made. If one of you doesn't pay they will pursue the other for the money. If neither of you pay they will pursue both of you through the courts to a repossession that will affect you for longer than a decade.

I don't anticipate there being any problems with paying the mortgage. I'm hoping the situation will last for a couple of years maximum, and then either one of us will buy the other out, or the house will be sold.

I suppose I was looking for what people think is morally right in terms of splitting the payments in the meantime. I had in my mind that the person living in the house could pay the interest on the mortgage and either split the repayment element 50/50, or change the mortgage to interest only. I don't know if my thinking is flawed though.

opinions4u wrote: »

Personally I think both of you should take legal advice or find a cheaper arbitration service locally.

I'm hoping we'll be able to sort it out without needing to do this, but it may be necessary further down the line.

opinions4u wrote: »

1) Who pays what (it would seem to be fair that the person remaining in the house pays more, but that isn't a given as everybody's circumstances are different).

Our circumstances are pretty much the same in terms of earnings, what we've paid into the house so far etc.

opinions4u wrote: »

2) Who receives what when the house is sold? If, for example you paid the whole mortgage for the next 2 years and then sold the house increases by £20k, does that £20k get split 50/50 or should you get more/all of it? Similarly, what happens if the house falls in value?

It would be simpler to keep everything 50/50.

opinions4u wrote: »

3) Who pays council tax and other bills?

Bills: Whoever lives there.
Maintenance/improvements: 50/50.

opinions4u wrote: »

4) What would happen if one or the other of you gets a new partner?

Unbridled happiness and a fairytale ending?

Seriously, I don't anticipate that being a problem. I can see it would be if we both continued living in the house though..!

opinions4u wrote: »

5) What should happen if either of you suffers a drop in income and can't maintain any agreement that you make?

Unlikely but very good point, I hadn't considered that.

opinions4u wrote: »

If you can come to an agreement between yourselves without the solicitors, which would save you a fair sum, and then get a solicitor to put such an agreement in writing, this should provide the platform to get on with your lives.

Even then, there is the risk that one party or the other may break the agreement. This risk is probably fairly high and to enforce it would involve expensive court costs.

To be honest I'd pay the penalty and sell the house. Make a clean break and get on with enjoying life.

Yep point taken. Things are complicated by the fact that one or both of us will probably be moving to a new city or cities in the next couple of years, but I realise there are risks of doing things this way, as you say.

getmore4less

The easy way to do this is to coninue to do the house 50:50 on the mortgage and any improvments/repairs.

Then pretend it is being let so the one living in the house pays a market rent which is split 50:50

All running costs should be paid by the person staying.

If a bill is due to the other person wanting something on a conract then you may wnt to adjust.

If space then the person staying can subsdise their rent by getting lodgers

Adjustment to the rent can be made to account for the lack of agents etc.

Dan29

getmore4less wrote: »

The easy way to do this is to coninue to do the house 50:50 on the mortgage and any improvments/repairs.

Then pretend it is being let so the one living in the house pays a market rent which is split 50:50

All running costs should be paid by the person staying.

If a bill is due to the other person wanting something on a conract then you may wnt to adjust.

If space then the person staying can subsdise their rent by getting lodgers

Adjustment to the rent can be made to account for the lack of agents etc.

Thanks getmore4less. Yeah I was thinking of this earlier and it seems to make sense.

So assuming mortgage £800pm, rental value £700pm and person moving out rents somewhere for £600pm.

Each pay £400 on mortgage. Person staying also pays half of £700 so £350. Total £750.

Person not staying pays £400 but receives the £350. They then pay their rent of £600. Total £650.

Is that right, and does it seem fair?

newtomoneysaving_2

Hi just stumbled upon this information.

Wife and I are getting divorced. She would like to stay in property with children but cant afford to buy me out.

Is there anymore info to the above I.E. we both pay half the mortgage, then she also pays half what the renting cost would be.

Obviously this means we are amicable about this but gives the chance for children not to be unsettled etc.

Thanks

Dan29

newtomoneysaving wrote: »

Hi just stumbled upon this information.

Wife and I are getting divorced. She would like to stay in property with children but cant afford to buy me out.

Is there anymore info to the above I.E. we both pay half the mortgage, then she also pays half what the renting cost would be.

Obviously this means we are amicable about this but gives the chance for children not to be unsettled etc.

Thanks

Hi newtomoneysaving

Yeah she pays you half what it would cost to rent the house, that's the way I understand it. Of course you'd also be paying her some sort of child support, I guess, so one would offset the other.

There don't seem to be any hard and fast rules, it's all about negotiation I suppose - as if either party ends up feeling hard done by then they'll just stop paying at some point anyway.