Money Moral Dilemma: Should I make mortgage overpayments ahead of my partner?

Former_MSE_Nick

This week's MoneySaver who wants advice asks...

I have recently taken on a mortgage with my partner, and since he earns less than I do we apportion the payments according to our income. I have the capacity to make overpayments while he doesn't (though his income is likely to overtake mine in the next few years) - should I do this to save us both money in the long-term, even though I'd still only own the same proportion of the house?

Unfortunately the MSE team can't always answer money moral dilemma questions as contributions are often emailed in or suggested in person. They are intended to be enjoyed as a point of debate and discussed at face value.

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Elisecas

There are really two parts to this question.

First, you call this person your partner and you bought a house with him. Do you not consider your cohabitation to be a permanent plan? This is something worth thinking through before you do anything else, as if you don't it will - and should - colour your next steps.

However, if you consider your partner to be your permanent life partner, and he feels the same way about money as you do - after all, he's going to earn more than you soon, you say, so then he'd overpay too - why not overpay?

This doesn't seem to be a financial question, not really, it's about whether you consider your partnership to be permanent, isn't it?

stampychan

I think you should overpay if you can but crucially- get it somewhere in writing that this is what you're doing. It sounds like you think he will reciprocate if he can in future which is great, but this should probably be clear to save heartache or arguments later.

Talk to him about equity share and ownership and if you can, get a cohabitation agreement. It's a legal document that sets out the agreed financial terms between the two of you, and protects you both in the event of a split. No, it's not very romantic, but it is a very simple and easy way to make sure that you decide fairly, now, and don't get stuck in a horrible situation in future.

seeroo

Definitely get a cohabitation agreement!!

I put my ex partner on the deeds and mortgage of my flat as I thought it was only fair if he was going to contribute towards the bills. He paid 30% towards the mortgage repayments because I earned more and he was also unemployed for 2 years so paid nothing in those years.

He always took the moral high ground about money and always said he wasn't interested in money but after we split up he demanded half the equity which legally he could do. I ended up paying £17,000 to buy him out of his share of my flat which I had lived in for 3 years before I met him. I was also left in the position that he disappeared for 9 months without any contact while I continued to pay the mortgage but in those months he was entitled to half of the equity that I had repaid. There was a case I read about where an ex partner had left and came back 20 years later asking for half the equity that she had repaid over all those years.

tomhill

A bit of a strange question. As stated above, the fist point is whether or not you consider him to (probably) be your permanent partner; I've never quite got people who done 'share' when they get married for example.

Anyway, the second part is whether you should over-pay. That kind of depends on your risk appetite. Personally, in the low-rate environment that we're in I'd be more inclined to shove it in some index tracker funds (given Brexit, probably foreign ones that are considered varied and stable!).

terill

in short, the answer is God no! Invest your money somewhere else and then in a few years when your partner has more money you could both make the same over payment. Otherwise, what if his prospects don't improve that much or he has more expensive debt to pay back first? Resentment may creep in. Sorry but most relationships don't last forever so you could be kicking yourself in 5 years time if you over pay now. Don't do it

Fisaplisap

I've done this- when I could I overpaid by £700. It'll make a massive difference to paying off your mortgage. In fact, any spare cash, try and throw it in. I hope to be mortgage free in two years- 10 years earlier than my initial mortgage taken out. I've nothing in stone regarding overpayments if something happens between me and my other half....but he's also overpaid when he received some money in a will. There's nothing better than receiving your annual mortgage statement and seeing how much a) you've saved in interest and b) how much sooner you're paying your mortgage off. Not even cake.

penguingirl

Compromise- get an offset mortgage where your individual savings are linked- you both get the benefit, but your savings are clearly ring fenced

janiebquick

Overpaying your mortgage - even by a small amount - can reduce the term considerably and is really worth doing. It sounds to me that you have doubts about your relationship with your partner as you can always change mortgage providers.

enjoyyourshoes

Depends:-

What is comparable interest rate with Mtgs Vs highest regular saver?

What else could you use £ for ? (lifetime holiday/experience?

Are there any technical penalties/limits to overpaying ?

Let alone all the ones mentioned above about partnership etc

When interest rates were higher on mtge I overpaid by spades, now its marginal so I invest in S&S Has (which I did not mention as an option!?)

getmore4less

This should have all been documented in the original agreement(trust deed).

Go back and do the job properly.