How best to do share of equity with family

Persephone123

Not sure if this is in the right place, so please feel free to move it if not.

The situation is this:

DH and I had to move overseas with his job. I am not permitted to work under the terms of the visa at the moment.

We've been here almost a year in rented accommodation, and have just sold our UK house because we expect to be here around 10 years or so. So we've been paying rent here and a UK mortgage plus other costs.

We have now found a house here to buy. The bank will only lend 10% less than we'd asked for. Although this size of deposit is doable it will eat all our savings and not leave much to do the renovations. Monthly costs of owing this house are not an issue - the mortgage is only a fraction more than our UK house was.

A close family member has recently kindly offered to help us out and we're going to approach them. If they were to come in we'd want any money they gave us to be a loan. What would be the best way to do this, assuming say 5% interest (I haven't a clue how to work out what the APR would be, for example)? I know another option would be to do a straightforward share of the profits if we sold, e.g. they put in 10% of the cost, then when we sold they get 10% back, including 10% profit, but if we were in the house a long time, that would be a long time to wait for their profit.

Anyone got any thoughts on how best to do this? Thanks!

getmore4less

Loan is the simplest,
They will get taxed on any interet you pay them so think of other ways to reward them like a free holiday.

equity share will complicate
Do they want the risk and their exit options are limited.

You also have curency exchange issues, do they lend in £ or your local income.