Paying off partners mortgage as alternative to savings account

Golfclubdude

My partner wants to pay off some of my mortgage as an alternative to putting the money in a savings account. When I sell the property in a few years I would give back the money plus interest (at the interest rate of the mortgage). Is this allowed and are there any tax issues?

In fact we intend to buy a house together in the future so really I would not necessarily "give back" the money directly but just put it towards the new house in my partners name, altering the ownership split of the new house to account for it. Does that make any difference?

John424

Yes, you could do that and pay her back if there are any proceeds after the bank have been paid back their mortgage? Sounds like a complex arrangement to untangle if you break up to me judging from the fact you are considering an 'ownership split' of any new house. What's the interest rate on your mortgage and savings accounts? If you have a mortgage offset account then you could just pay her money into that thus reducing your mortgage payments?

bristol_pilot

I wouldn't do this unless you are married.

If you split, you will find that your partner has a claim on your house that might be disproportionate to the amount actually paid - worst case scenario is that you split and you lose your house. I might even venture to suggest, as I am a suspicious type of guy, that this might even be her 'plan'.

If you are married, you might as well go ahead.

CKhalvashi

bristol_pilot wrote: »

I wouldn't do this unless you are married.

If you split, you will find that your partner has a claim on your house that might be disproportionate to the amount actually paid - worst case scenario is that you split and you lose your house. I might even venture to suggest, as I am a suspicious type of guy, that this might even be her 'plan'.

If you are married, you might as well go ahead.

I'm with not doing this unless there's a contract in place.

If you can get an offset account in your own name, I may suggest beginning to think about it, but until then, certainly not.

CK

zzzLazyDaisy

Golfclubdude wrote: »

My partner wants to pay off some of my mortgage as an alternative to putting the money in a savings account. When I sell the property in a few years I would give back the money plus interest (at the interest rate of the mortgage). Is this allowed and are there any tax issues?

If you want to give your partner a share of your property, work out the %age of the value of your property that they are buying and put them on the deeds as tenants in common, with a trust deed setting out exactly who gets what share of the property when it is sold.

If that is not what you wish to achieve, stay away from this scheme, because in effect that is what you are doing, but without the paperwork and with room for dispute and lawyers fees to sort the mess out. Google 'beneficial interest in property'

amnblog

Sounds like an accident waiting to happen.

If the financial benefit to either of you worth the risk to your relationship?

Get your partner to buy some premium bonds and split the winnings with you!