How to split house & mortgage 3 ways when 1 person isn't contributing toward deposit?

ViolaLass

Except that cohab 3 will have spent more on interest due to owing more on the mortgage.

zzzLazyDaisy

ViolaLass wrote: »

Except that cohab 3 will have spent more on interest due to owing more on the mortgage.

And they will also have had the benefit of living in a house which presumably cohabitants 1 & 2 could not afford on their own, even with their deposits (that is a big presumption so apologies if I am wrong, no offence intended)

ViolaLass

zzzLazyDaisy wrote: »

And they will also have had the benefit of living in a house which presumably cohabitants 1 & 2 could not afford on their own, even with their deposits (that is a big presumption so apologies if I am wrong, no offence intended)

I was responding to post 51, the one before mine. Did you think I was responding to something else?

Ilya_Ilyich

ViolaLass wrote: »

Except that cohab 3 will have spent more on interest due to owing more on the mortgage.

How is this being taken into account though? It looks like the split is just "3 is responsible for 49% of the loan therefore pays 49% of each monthly payment" but that results in him paying substantially less than 1 and 2.

Sheveko

zzzLazyDaisy wrote: »

And they will also have had the benefit of living in a house which presumably cohabitants 1 & 2 could not afford on their own, even with their deposits (that is a big presumption so apologies if I am wrong, no offence intended)

No apologies needed, that's correct.

Sheveko

Ilya_Ilyich wrote: »

How is this being taken into account though? It looks like the split is just "3 is responsible for 49% of the loan therefore pays 49% of each monthly payment" but that results in him paying substantially less than 1 and 2.

3 pays 83333.33 + interest over term
2 pays 43333.33 + interest over term + 40000
1 pays 43333.33 + interest over term + 40000

ViolaLass

Ilya_Ilyich wrote: »

How is this being taken into account though? It looks like the split is just "3 is responsible for 49% of the loan therefore pays 49% of each monthly payment" but that results in him paying substantially less than 1 and 2.

3 will have to pay interest on the £40k they are not stumping up for the deposit. The other two will not.

Sheveko

Ilya_Ilyich wrote: »

Unless I'm missing something it looks like Cohabitants 1 and 2 are getting a bad deal out of this. Correct me if I'm wrong but if you hold the investment to term each cohab has spent £83,333 absolutely and getting a third each of equity. But 1 and 2's payments were frontloaded so their accumulated value should be higher than 3's and they should be given a higher share of the equity. This will hold at any time during the term so essentially 1 and 2 are subsidising 3 even though they're the ones coming up with the initial capital.

Where would this accumulation come from though? The 40000 deposits are not earning interest.

Ilya_Ilyich

Sorry if I'm completely misunderstanding this. But from 3.:
3. THE COHABITANTS agree that each is responsible for their respective shares of the mortgage payments as follows (which may be adjusted in accordance with clause 1.4):

Cohabitant No. 1: 25.4902 Percent

Cohabitant No. 2: 25.4902 Percent

Cohabitant No. 3: 49.0196 Percent

So if we use the repayment schedule in your linked spreadsheets of £783.36pm for 300 months, to me this says 1&2 pay £40000 now + £199.68pm, 3 pays £0 now + £384.00 pm. Is that wrong?

Sheveko wrote: »

Where would this accumulation come from though? The 40000 deposits are not earning interest.

Exactly!

Sheveko

Ilya_Ilyich wrote: »

So if we use the repayment schedule in your linked spreadsheets of £783.36pm for 300 months, to me this says 1&2 pay £40000 now + £199.68pm, 3 pays £0 now + £384.00 pm. Is that wrong?

That's correct.

Not sure what you mean by 'exactly'. Where would this suggested accumulation come from?