Splitting new mortgage

zoemk12

Not very romantic but my partner and I are about to buy a house together and he will own 62% & me the remaining 38%. This is because he’s putting all the equity in. 

I assume we will split the mortgage 50/50 but should it be more 60/40 or for the sake of a £100pcm should I not worry? 

getmore4less

Numbers?
Cash up front from both for full cost of buying.
Size of mortgage.

How has 62:38 been worked out?

many get it wrong.

zoemk12

Buying hse 320k
75k deposit from him
245k mortgage 
10k from me which will be used for expenses & house stuff 

MWT

I would have said 60:40 since if you are splitting the mortgage 50:50 then so should the costs be split, so your £10k is really £5k for the deposit and £5k towards expenses and his deposit is £70k with £5k towards the expenses...

Thrugelmir

The declaration of trust could be worded so that both of you get your initial deposit contributions back first. Before the remainder of the equity is divided.  You could then pay the mortgage 50/50. 

getmore4less

zoemk12 said:

Buying hse 320k
75k deposit from him
245k mortgage 
10k from me which will be used for expenses & house stuff 

Total cost £330k
You buy £10k + £122.5k = 40.15%
On cash out you get that % and then pay off 1/2 the mortgage from that.

The get your deposits back would be the equivalent of him lending you £32.5k interest free.

You could split the mortgage to even it up 50:50  take on £155k he pays £90

zoemk12

getmore4less said:

zoemk12 said:

Buying hse 320k
75k deposit from him
245k mortgage 
10k from me which will be used for expenses & house stuff 

Total cost £330k
You buy £10k + £122.5k = 40.15%
On cash out you get that % and then pay off 1/2 the mortgage from that.

The get your deposits back would be the equivalent of him lending you £32.5k interest free.

You could split the mortgage to even it up 50:50  take on £155k he pays £90

Thanks for replying

Not sure I understand. What does he pay £90 for? 

zoemk12

Thrugelmir said:

The declaration of trust could be worded so that both of you get your initial deposit contributions back first. Before the remainder of the equity is divided.  You could then pay the mortgage 50/50. 

Ok thanks, our solicitor is preparing one so I’ll speak to her about this. 

getmore4less

zoemk12 said:

getmore4less said:

zoemk12 said:

Buying hse 320k
75k deposit from him
245k mortgage 
10k from me which will be used for expenses & house stuff 

Total cost £330k
You buy £10k + £122.5k = 40.15%
On cash out you get that % and then pay off 1/2 the mortgage from that.

The get your deposits back would be the equivalent of him lending you £32.5k interest free.

You could split the mortgage to even it up 50:50  take on £155k he pays £90

Thanks for replying

Not sure I understand. What does he pay £90 for? 

that should be £90k of the mortgage.
£155k(you) + £90k(him) = £245k  that way with your cash inputs you own 50:50.

be careful with solicitors and DOT a lot are not that clued up and make errors in the drafting especially with equitable ones where they do the split after  the mortgage when it should be before then have the mortgage taken off each share
Post it before agreeing so it can be checked for flaws
.
The important thing is you cash input does not get ignored as that loses you 2% of the property before you start.

Also if you go down the equitable split you should do repairs maintenance and improvements at the same split not 50:50

getmore4less

Should add once you have an algorithm you stress  test it with different values and time scales.

eg  if we don't count your £10k  then if you unwind on day one(before any payments and costs)  you are £10k down on the deal which is clearly not correct or fair.