Calculating how to buy partner out when different contributions were made

zedox1

@getmore4less

The original mortgage included a 999 arrangement fee.
We renewed the mortaged and borrowed the 12k more in 2019, and again another 999 arrangement fee

Should i include those fees as part of the cost towards the purchase/investment of the house? I guess I should as it was added to the mortgage.

Thrugelmir

zedox1 said:

Should i include those fees as part of the cost towards the purchase/investment of the house? I guess I should as it was added to the mortgage.

Bottom line is that you need to come a mutual compromise. With no legal agreement you can analyse as much as you want. Makes no odds if the other party simply says no I want more. What you do need to consider is that your ex has to go through the entire buying process again and create a new home. You are the fortunate position of remaining in the property. Once a relationship becomes purely about money and what's mine, they can quickly sour. People can soon become total strangers. 

zedox1

Thrugelmir said:

zedox1 said:

Should i include those fees as part of the cost towards the purchase/investment of the house? I guess I should as it was added to the mortgage.

Bottom line is that you need to come a mutual compromise. With no legal agreement you can analyse as much as you want. Makes no odds if the other party simply says no I want more. What you do need to consider is that your ex has to go through the entire buying process again and create a new home. You are the fortunate position of remaining in the property. Once a relationship becomes purely about money and what's mine, they can quickly sour. People can soon become total strangers. 

Sure I understand. I needed to get my own figures together first so I know what's what. She will be doing the same, and then we will meet and agree/compromise.

Many people just assume that a breakup means bitterness, resentment and conflict, which I guess is true in majority of cases. But in our case we are on good terms, ammicable and both on the same page that we should each receive our investment back plus a split of the remaining equity.

getmore4less

zedox1 said:

@getmore4less

The original mortgage included a 999 arrangement fee.
We renewed the mortaged and borrowed the 12k more in 2019, and again another 999 arrangement fee

Should i include those fees as part of the cost towards the purchase/investment of the house? I guess I should as it was added to the mortgage.

If it was added to the mortgage and paid equally it comes out in the wash for the get your money back scenario.

For the equity based calcs  it will change it a small amount  as it amounts to £1k each and £2k on the total so the % changes a tiny amount.

Twixty3

If I was your ex GF I would not accept what you propose in your original post. 

You propose to give yourself 10% of £425000 which  gives you growth on your £33k deposit  yet her 0 deposit remains 0.  Surely she is entitled to growth too rather than just splitting what remains after costs (including your growth) .    After all you could inherit a house , live in it for 4 years and do nothing to improve it but still make a profit from no outlay if sold in 4 years time.  0 can become something.  

You will also benefit more from works done to the house in the future if prices continue to rise, some of which she paid for.  

Purchase costs are simply what they are and were not put directly into the house per se. She would end up losing more here yet you are the one remaining and with the bigger share.  You should probably meet the larger share of the cost here.  

I imagine she would like to purchase another property at some point and a fairer split would help her.  

I’m not sure you are as fair as you think you are but ultimately that is for her to decide. So what others think doesn’t really matter as she is key to any agreement.    

zedox1

Twixty3 said:

If I was your ex GF I would not accept what you propose in your original post. 

You propose to give yourself 10% of £425000 which  gives you growth on your £33k deposit  yet her 0 deposit remains 0.  Surely she is entitled to growth too rather than just splitting what remains after costs (including your growth) .    After all you could inherit a house , live in it for 4 years and do nothing to improve it but still make a profit from no outlay if sold in 4 years time.  0 can become something.  

You will also benefit more from works done to the house in the future if prices continue to rise, some of which she paid for.  

Purchase costs are simply what they are and were not put directly into the house per se. She would end up losing more here yet you are the one remaining and with the bigger share.  You should probably meet the larger share of the cost here.  

I imagine she would like to purchase another property at some point and a fairer split would help her.  

I’m not sure you are as fair as you think you are but ultimately that is for her to decide. So what others think doesn’t really matter as she is key to any agreement.    

You're absolutely right, and I'm glad I created this topic.
There was another topic on this forum where someone proposed that their 10% deposit equalled 10% ownership.

Anyway, setting that aside. I'm happy with @getmore4less calculations. Current value less the mortgage balance less combined contribution divide what's left equally then add individual contribution

getmore4less

Twixty3 said:

If I was your ex GF I would not accept what you propose in your original post. 

You propose to give yourself 10% of £425000 which  gives you growth on your £33k deposit  yet her 0 deposit remains 0.  Surely she is entitled to growth too rather than just splitting what remains after costs (including your growth) .    After all you could inherit a house , live in it for 4 years and do nothing to improve it but still make a profit from no outlay if sold in 4 years time.  0 can become something.  

You will also benefit more from works done to the house in the future if prices continue to rise, some of which she paid for.  

Purchase costs are simply what they are and were not put directly into the house per se. She would end up losing more here yet you are the one remaining and with the bigger share.  You should probably meet the larger share of the cost here.  

I imagine she would like to purchase another property at some point and a fairer split would help her.  

I’m not sure you are as fair as you think you are but ultimately that is for her to decide. So what others think doesn’t really matter as she is key to any agreement.    

Future increases are not relevant this is it is the equivalent of a sale by two people  and a purchase by one at current market value.

No one selling expects adjustments because the future owners are going to benefit from further increases

ALL purchase costs should be included when doing equity calculations, a common mistake people make is to leave them out and get the ownership wrong from the start when using equity based,  a even bigger error is to not factor the mortgage properly if at all.


In this case because the outlays are relatively small it does not make a big difference to the range of what would considered fair. 

getmore4less

zedox1 said:

Twixty3 said:

If I was your ex GF I would not accept what you propose in your original post. 

You propose to give yourself 10% of £425000 which  gives you growth on your £33k deposit  yet her 0 deposit remains 0.  Surely she is entitled to growth too rather than just splitting what remains after costs (including your growth) .    After all you could inherit a house , live in it for 4 years and do nothing to improve it but still make a profit from no outlay if sold in 4 years time.  0 can become something.  

You will also benefit more from works done to the house in the future if prices continue to rise, some of which she paid for.  

Purchase costs are simply what they are and were not put directly into the house per se. She would end up losing more here yet you are the one remaining and with the bigger share.  You should probably meet the larger share of the cost here.  

I imagine she would like to purchase another property at some point and a fairer split would help her.  

I’m not sure you are as fair as you think you are but ultimately that is for her to decide. So what others think doesn’t really matter as she is key to any agreement.    

You're absolutely right, and I'm glad I created this topic.
There was another topic on this forum where someone proposed that their 10% deposit equalled 10% ownership.

Anyway, setting that aside. I'm happy with @getmore4less calculations. Current value less the mortgage balance less combined contribution divide what's left equally then add individual contribution

if doing equity based it would, but the other 90% is split 45% each as the mortgage is paid 50:50.
That creates a starting point of 55:45 
(Actually slightly different as there is the £999 mortgage fee added and the £3,500 costs to factor in. 

As you are happy with the get your money back approach that amounts to a £15k rising to £27k over the 4 years interest free loan.

Twixty3

getmore4less said:

Twixty3 said:

If I was your ex GF I would not accept what you propose in your original post. 

You propose to give yourself 10% of £425000 which  gives you growth on your £33k deposit  yet her 0 deposit remains 0.  Surely she is entitled to growth too rather than just splitting what remains after costs (including your growth) .    After all you could inherit a house , live in it for 4 years and do nothing to improve it but still make a profit from no outlay if sold in 4 years time.  0 can become something.  

You will also benefit more from works done to the house in the future if prices continue to rise, some of which she paid for.  

Purchase costs are simply what they are and were not put directly into the house per se. She would end up losing more here yet you are the one remaining and with the bigger share.  You should probably meet the larger share of the cost here.  

I imagine she would like to purchase another property at some point and a fairer split would help her.  

I’m not sure you are as fair as you think you are but ultimately that is for her to decide. So what others think doesn’t really matter as she is key to any agreement.    

Future increases are not relevant this is it is the equivalent of a sale by two people  and a purchase by one at current market value.

No one selling expects adjustments because the future owners are going to benefit from further increases

ALL purchase costs should be included when doing equity calculations, a common mistake people make is to leave them out and get the ownership wrong from the start when using equity based,  a even bigger error is to not factor the mortgage properly if at all.


In this case because the outlays are relatively small it does not make a big difference to the range of what would considered fair. 

Fair enough when put like that 😊

Will she agree though? . Have to bear in mind that most do not. 

zedox1

for the 1st 4 years mortgage payments were 50/50. Since the split I've agreed to continue paying the mortgage by myself.
How would I reflect this in the calculations?