How to split our mortgage payments fairly

class2ldn

Hi guys, this may be in the wrong thread so I apologise in advance.
Me and my partner are about to apply for a mortgage but I'm a bit worried about how we are going to share the costs.
Now I'm earning around 47k a year and she's on around 18k.
At the moment we save up around £500 per month. This is on top of our bills and rent etc.
I just feel I'm paying alot more then she is but I appreciate I earn a lot more so don't want to come across as selfish.
I put in 1200 a month into our joint account, 775 for rent and the rest for savings so 425. She puts in 475 and thats to effectively cover the bills ( electric, water, tax etc) so it's probably a bit over 500.
Just trying to figure out a way that we can save up so it's fair. I don't mind paying more as I earn more but a mortgage is probably going to cost us around 1200 per month and thats what I'm saving now so it will leave me with around 1200 for my bills, loans, child maintenance etc. Once these come out I've not much left.
She also pays for the food shopping so another 150 a month.
I don't want to be effectively paying the whole mortgage myself while she just bungs 400 quid in to cover bills etc.
What's the best way of splitting it fairly according to our income.
Many thanks

G_M

Are you married?

This may seem like a personal, irrelevant, question, but it is indicative of your relationship.

In most cases, married couples see houshold and family income and expenditure as joint: it belongs to the 'family'. Who earns what and who pays what does not matter, as long as the family finances balance.

If you are not married, the question is, why not?

*Philosophial/religeous/political objection? Fine. Consider yourselves in the abve catagory and there's the answer to your question.

* not ready for the commitment/doubts about the relationship? In that case, should you be going into joint property ownership at all..........?

PixelPound

You need a very big chat, especially as it appears you begrudge her having to pay less than you. Have you thought how you want to split ownership of the house? You could do it so you own 70% and her 30%, to reflect what you both put in. However she may see that you are both putting relative equal portions of your wage in, you just have a bigger pie to take the slice from, so would think 50-50 is fair.

A big conversation is needed, and don't say what people on this forum recommend as that's likely to infuriate that you've discussed it outside before with her.

GoldenShadow

My OH earns 30K I earn 23K. At the moment we pay a % according to our income. It's likely we will end up keeping a smaller % in our current accounts for random frivolous spends instead providing house purchase goes through OK. Then probably 80% of each our incomes will go into the joint pot with everything but presents for each other/frivolous buys coming out of it.

Pixie5740

Where is the deposit coming from? Both of you? Equal amounts?

How will the property be owned? Joint tenants? Tenants in Common, equal or unequal shares?

One way to deal with household bills is to each pay a certain % of your income into the household pot to cover the mortgage and all bills.

Another way is for everything to go into the joint household finances and you each receive the same amount of "free" spending money each month do as you please with.

It's definitely something you have to sort out before you buy a property together.

PixelPound

G_M wrote: »

Are you married?

This may seem like a personal, irrelevant, question, but it is indicative of your relationship.

In most cases, married couples see houshold and family income and expenditure as joint: it belongs to the 'family'. Who earns what and who pays what does not matter, as long as the family finances balance.

If you are not married, the question is, why not?

*Philosophial/religeous/political objection? Fine. Consider yourselves in the abve catagory and there's the answer to your question.

* not ready for the commitment/doubts about the relationship? In that case, should you be going into joint property ownership at all..........?

Your reply wasn't there when I posted :rotfl: , though I do agree, the nature of the relationship needs to be clarified, by both. As the OP talks of child maintenance, then maybe there is a fear of putting in the majority amount, but not getting a fair return, especially if they have already lost a marital home once.

Derwent

G_M wrote: »

Are you married?

This may seem like a personal, irrelevant, question, but it is indicative of your relationship.

In most cases, married couples see houshold and family income and expenditure as joint: it belongs to the 'family'. Who earns what and who pays what does not matter, as long as the family finances balance.

If you are not married, the question is, why not?

*Philosophial/religeous/political objection? Fine. Consider yourselves in the abve catagory and there's the answer to your question.

* not ready for the commitment/doubts about the relationship? In that case, should you be going into joint property ownership at all..........?

Spot on, I would not even contemplate buying a property with someone who I was not willing to be equal partners with.


I mean, to extrapolate it further, what happens if you have kids ? Do you proportion the costs of those too ?

TBagpuss

you need to discuss it, so that you agree something you both feel is fair.

Various possibilities:

1. You agree to each pay the same proportion of your income into the joint account for the mortgage and bills. So if your total monthly costs are £1,700, you might split that so she pays in £471 and you pay in £1,229, which means that you would each be paying around 31% of your income.

2, You agree to pay in fixed amounts and agree that you will own the property in those same proportions (It is likely to be fairest to treat this as the outgoings as a whole, so if you pay £1200 and she pays £400 to joint mortgage+bills, then you would agree to own 7-/30, even if in practice her money went on bills and yours on mortgage (or vice versa)

3. You could agree to put all of the money into a joint account and then take out a set amount each for personal spending, and can discuss whether you each keep the same amount for personal spending, or whether you keep a higher amount.

Think about your longer term plans; if you always have more disposable income than her then that can lead to resentment, not to mention practical issues (what will you do about things such as holidays, if you can afford to save for nice holidays and she can't?)

One option might be to agree a split based on proportion of income or to have a declaration of trust entitling you to shares in the house in the properptions you contribute, but have an agreement in place that you will review it after a set period of time, perhaps 2 years. That way, if things go wrong in the initial period you each know where you stand, and assuming they don't, you may feel more ready o merge you finances and think of it as 'our money' rather than 'your money and her her money' once you have been living together for 2 years.

SalarySlave

I would say you divide it up percentage wise of what you both take home net. I did a few calculation making the assumptions that neither of you have a student loan or work based pensions as deduction I know this is unlikely so you may have to adjust the figures accordingly.
You take home £2882.14
Partner take home £1277.27
Total take home £4159.41
Your percentage 69%
Partner percentage 31% (These have been rounded)
You need to decide how much to put into a joint account each month to cover ALL bills including mortgage. Say £2000 for example would mean
you contribute : £1380
Partner contribute £620
This is how I would work out fairly what to contribute. This needs to be on NET income, not gross as you will lose a higher percentage of your income due to paying 40% tax on a portion of you income and the personal allowance representing a smaller percentage of your income.

class2ldn

Thanks for the replies.
No we are not married, got engaged on valentines day lol.
I don't begrudge her anything and I certainly don't think we should be paying equal as I earn double what she does a month.
My maintenance payments are from a previous relationship.
Thing is i dont have the money to spend on my own luxuries even like going to the cinema etc. She's seems to go out a lot and buy hair stuff etc like it's going of fashion. Just seems like she's not as committed as me on a financial level.
This came about as a colleague of mine has a partner who earns the same as mine and she's putting in 650-700 each month to boost their savings. I'm just wondering why my partner can't do the same sort of figure, well it's because she won't stop spending it lol.
Thing is i dont want to stop her going out etc as she works hard and deserves some down time I juat think if I can afford to put in 1200 each month then why can't she put in half of that when she's earning half. I take home 2400 amd she takes home 1200 roughly. She does have other costs like car insurance, car loan and petrol but these only total 350.
I don't know maybe I'm being too harsh as she probably doesn't have that much left over really.

HappyMJ

class2ldn wrote: »

Thanks for the replies.
No we are not married, got engaged on valentines day lol.
I don't begrudge her anything and I certainly don't think we should be paying equal as I earn double what she does a month.
My maintenance payments are from a previous relationship.
Thing is i dont have the money to spend on my own luxuries even like going to the cinema etc. She's seems to go out a lot and buy hair stuff etc like it's going of fashion. Just seems like she's not as committed as me on a financial level.
This came about as a colleague of mine has a partner who earns the same as mine and she's putting in 650-700 each month to boost their savings. I'm just wondering why my partner can't do the same sort of figure, well it's because she won't stop spending it lol.
Thing is i dont want to stop her going out etc as she works hard and deserves some down time I juat think if I can afford to put in 1200 each month then why can't she put in half of that when she's earning half. I take home 2400 amd she takes home 1200 roughly. She does have other costs like car insurance, car loan and petrol but these only total 350.
I don't know maybe I'm being too harsh as she probably doesn't have that much left over really.

I can't see this relationship working on a financial level.

You need to agree amongst yourselves what you each contribute to "the pot". All joint expenses come out of "the pot". Whatever you keep you spend on whatever you want or save it if that's your plan and stop begrudging what she spends her money on. If she's a spendthrift and your a saver you'll find it difficult to live together if she never saves a penny and you do all the saving.

Technically the entire £3,600 should go in "the pot" you pay all the joint bills including any work related costs such as the car expenses she has which enables her to get to work and earn money and split the rest 50/50.

I would also say your child maintenance is a joint expense as that is calculated based on your income...but many may not see it that way.