Girlfriend wishes to contribute to my mortgage

[Scougar]

How does that song go again? I ain't saying she a gold digga, but she ain't playing wi'd no broke ******.

If she has 45k spare, she clearly isn't broke.

I don't know the specifics, but when you get into a relationship where people already have assets, you have to tread lightly. It's up to the OP if he wants to give up part of his investment or not.

It just needs to clear on what the expectations are and why she wants to invest.

Just remember, if you part, you would need to give money back and that would mean having to pull it out of your equity, which might cost you in taxes.

 

[ivrytwr3]

It's all well and good telling the OP to not touch this with a barge pole, however, the reality may be somewhat different. Telling your gf you don't trust/love her enough to do this will no doubt lead to insecurity about the relationship - some of you may say, "good".

If your dream is of a forever home, why not suggest she put the money into a high interest savings account or lock it away in S&S for a few years. Once you are ready to buy, THEN the money can be used to fund this and she will have her interest in the property.

But i agree, lumping it into your mortgage now may not be the best idea - how you approach this however, may be tricky.

 

[Mercenary Keyboard Warrior]

You are missing my point. It is not about what is beneficial or not. It is the whole money issue already being in doubt with the person. Signing documents about what you can and cannot contribute. To me at least that sounds alien and I hope my daughter never ends up with someone like that. You start a relationship on that foot and it is doomed from the start imo.

You don't go out for a meal and ask her to pay for the dinner to protect your "income" do you?

I agree with you in general, but its now recommended that when relationships start you do a living together agreement.
It forces a slightly difficult conversation at the start, you know during the honeymoon period to be talking about how to divide up if you split up, but it saves a lot of hastle down the line.

 

[Murf]

You are missing my point. It is not about what is beneficial or not. It is the whole money issue already being in doubt with the person. Signing documents about what you can and cannot contribute. To me at least that sounds alien and I hope my daughter never ends up with someone like that. You start a relationship on that foot and it is doomed from the start imo.

You don't go out for a meal and ask her to pay for the dinner to protect your "income" do you?

I actually disagree. For me it's about fairness.

When we bought our house my wife had a much larger deposit, because she wasn't an idiot like me and had actually saved money in her 20s. So when we bought our house, the equity was split 58%\42% in her favour. Currently, I earn more so I pay a higher share of the household bills. That gets reviewed annually though and in previous years she's contributed more than I have when she earned more.

So our money situation was not 'in doubt' because I removed that doubt when we bought our place by having what was fair written into the ownership agreement.

 

[adam cool dude]

I actually disagree. For me it's about fairness.

When we bought our house my wife had a much larger deposit, because she wasn't an idiot like me and had actually saved money in her 20s. So when we bought our house, the equity was split 58%\42% in her favour. Currently, I earn more so I pay a higher share of the household bills. That gets reviewed annually though and in previous years she's contributed more than I have when she earned more.

So our money situation was not 'in doubt' because I removed that doubt when we bought our place by having what was fair written into the ownership agreement.

We were the same although I had the larger deposit. She pays the mortgage and I pay for everything else. We never really discussed it. She had an account with Barclays and our mortgage was with Barclays and I was in the middle of changing my current account so it just kind of fell into that split. We talk big purchases but normally never talk about money at all. I put my wage into savings as I get paid more and do the longer hours by far but I do not turn around and ask for more because of "fairness" that isn't how it works at least in my eyes.

 

[Murf]

Well you need the same idea of fairness for a start. And I didn't think it would be fair for my wife to have to put down a deposit ten times the size I was contributing without receiving more equity. A lot of relationships fail due to money pressures\financial stress, so maybe you should talk about it? I don't tell my wife what to spend her money on, and she doesn't interfere with my purchases. Big or small. As long as we fund our joint account to cover all bills, joint savings, family holidays and outings etc. then we're covered.

Anyway, I'm now taking this thread way off track. Long and short of it for me, this idea is complicated, unnecessary and sub-optimal financially. I wouldn't bother, and I'd hope the OP's other half would understand and respect why.

 

[413x]

I'm in a long term relationship, unmarried no kids. We have the house together.. Tennants in common.

The share is very unequal due to my substantially different deposits and contributions. 80:20 me. Same with mortgage contributions.

My gf did (6 years in) raised it as a "why"

I told her..
If we stay together long term it won't matter because it's not like she's banned to. 20pc of the house Day to day we live in it 50:50. If we got married. For example it would become moot. She will share all the gains anyway.

But if we break up, we effectively become strangers.. So it's fair... You wouldn't gift a stranger 50:50 your house if you contribute 80 percent.

She was absolutely fine with it.



I'd raise something like that. If she's a good person she'll understand as its fair. So let her keep saving. Maybe aim it as saving for a second house that can be in her name or something.

I get she might want to be involved in an innocent "we are a couple if we both own"... But it also maybe a really sly ploy to get in on it.


Either way.. I would absolutely not let her on the mortgage at 1 year!

 

[JollyJamma]

Hey all.
I have a house that is mortgaged. I have significant equity in it, with 180-190k being a solid estimate.

My girlfriend moved in with me in 2022. Upon doing so we both signed a form that we created together saying that per month she will pay half the bills, £100 towards general repairs and upkeep, but £0 towards upgrades and £0 towards the mortgage. It explicitly stated that she will have no claim over the property in any form.

The relationship is going well, and she wishes to put £45k into the mortgage plus start contributing each month.

We are both of the opinion is that we need another cohabitation agreement, but this time it should be performed with a Solicitor.

Our plans are to encircle the equity that we both currently have, then agree some form of split going forward with future equity.
Neither of us are interested in getting married.

I wondered if there was anything I could be missing here with our intent on getting a cohabitation agreement from a Solicitor?

If you do do it, just put in a Clause That clearly states that each party is entitled to the relative amount that they contributed to the mortgage during the term.


I wouldn’t do it at all and I’d help her buy her own house because I’ve seen what happens when it goes wrong and it’s waaaaay messier than a divorce.

 

[throwaway4372]

I'm in a long term relationship, unmarried no kids. We have the house together.. Tenants in common.

The share is very unequal due to my substantially different deposits and contributions. 80:20 me. Same with mortgage contributions.

My gf did (6 years in) raised it as a "why"

I told her..
If we stay together long term it won't matter because it's not like she's banned to. 20pc of the house Day to day we live in it 50:50. If we got married. For example it would become moot. She will share all the gains anyway.

But if we break up, we effectively become strangers.. So it's fair... You wouldn't gift a stranger 50:50 your house if you contribute 80 percent.

She was absolutely fine with it.

She just has to marry you and break up and it's a free 30% of a house?

 

[Metalface Mark]

I moved in with my girlfriend of the time, she put in 10k, i put in about 30k, we split the mortage 50/50 but i was the only one named as she had been declared bankrupt. When we split up i gave her back her 10k and half of what we had made in the house, about 50k. There was no legal thing in place, i just did what was fair and thats what i thought was fair.

Its a similar situation to what you have, I dont know legally what any claim would be but I think if you are both decent people then you would act decently if you split up.

 

[413x]

Everything is a risk in life. It depends how you take it. For the sake of him potentially losing 10 grand in 10 years or the possibility of being with your soul mate for life. It is amazing how fickle some people can be with money. There is more to life.

A soul mate wouldn't be bothered about not being on the mortgage as they'd effectively be sharing 50:50 if they ended up together forever.

You can flip it the other way.. If they are fully committed and belive it's going to last it doesn't matter.

Its more likely someone has doubts about the relationship if they want to get into the paper work.

 

[413x]

She just has to marry you and break up and it's a free 30% of a house?

I'm technically not sure how it works if you're tennants in common nd then get married.

Its something to look into as I'd actually rather keep it how it is. Fair.
Obviously divorce is real, common and messy when it gets unfair financially

 

[dowie]

Has disaster written all over it. Guessing OP wouldn't have the cash to buy her out if things went waywards? Just tell her to keep the money in a saving account until the point you are ready to move

He could perhaps draw down from his overpayments, the question is why... is she hoping house prices are going to rise significantly?

Apart from your missing the fact that if hes had to pay £45k more in scenario 1, than in scenario 2 he should have £45k.
In fact its more than that since he should be making gains on his £45k he hasn't needed to pay off the mortgage, less interest etc

Yes his house asset value is worth less, but he has a chunk of cash which he in theory should have been able to make more on than he lost by "giving her a share"

@Hades could perhaps drop the assumption that the house is fully paid off, after all you don't need to pay off a mortgage fully in order to move or to sell at a profit.

I mean currently if the house's value increases by say 100k (ambitious assumption I know) that's 100k extra equity for the OP, but if she now owns a circa 50k stake to his 200k stake then that same future 100k rise in the value of the house means she gets 20k that would have otherwise gone to the OP and he only gets 80k.

In both scenarios, there could still be some mortgage left to pay off, essentially, it's a return on a leveraged investment and if that leveraged investment performs well he'd be giving up some of his return there to his GF... and, in theory, having to find 20k to pay her off with if they did split.

I'm not sure house prices are likely to rise much currently though, they seem a bit stagnant and so she'd essentially be treating him more like a savings account. It seems like she'd be better off just saving/investing her 45k and not complicating things, there isn't a clear benefit other than some emotive aspect of having a stake in the property... which seems moot if it's still in the OPs name and with some agreement to pay her back if they split.

 

[dowie]

You are missing my point. It is not about what is beneficial or not. It is the whole money issue already being in doubt with the person. Signing documents about what you can and cannot contribute. To me at least that sounds alien and I hope my daughter never ends up with someone like that. You start a relationship on that foot and it is doomed from the start imo.

So if you gave your daughter 45k from say her grandparent's inheritance and she told you she was going to pass it onto her boyfriend to overpay the mortgage on his house you'd be totally happy with her not signing anything obliging him to pay her back in the event they split, after all her boyfriend is her soulmate and he can be trusted with the 45k?

Ultimately most long-term relationships end up signing an important document, namely a marriage certificate (or civil partnership).

I think in the case of couples who don't want to get married as they don't agree with marriage because of some vague feelings or historical connotations of marriage with the wife being seen as the husband's property etc. then a civil partnership (almost equivalent to marriage in law) ought to be considered. Though frankly, we've had non-religious civil ceremonies for weddings for a while now anyway, at least for hetero couples.

 

[fez]

You should post this to /r/relationshipadvice in all honestly. That will quickly solve your issue.

You will spend £5k of that money on therapy and then you will break up because having £45k is a red flag and you're a man, shes a lady etc etc. It was never going to work out.

 

[413x]

I agree with you in general, but its now recommended that when relationships start you do a living together agreement.
It forces a slightly difficult conversation at the start, you know during the honeymoon period to be talking about how to divide up if you split up, but it saves a lot of hastle down the line.

We discussed this, as in a past relationship there was a difficulty with a small rental deposit dispute.


Its just easier to have it all clear at the start.

For me this is alignment. A mature person should understand life isn't a fairytale, lots of relationships end in divorce. Amicable or not.

Its much easier to not have messy finances with dodgy fiancés mixed together.

We are clear on kids, on finances. Not so clear on emigration/geography but working on it.

Next house it'll be reviewed. She might want to carry on at 20:80.which works for our salaries too. If she wants to contribute more that's fine too.


It might sound a bit cold, but means we don't really talk about money at all. Which is nice.

 

[Toekiller]

It's a no from me. It adds quite a complication should you break up. It's hard enough breaking up never mind dealing with the fallout of that. I'm sure she could invest that 45k elsewhere. Might be different if you were married.

 

[Kamakazie!]

You are missing my point. It is not about what is beneficial or not. It is the whole money issue already being in doubt with the person. Signing documents about what you can and cannot contribute. To me at least that sounds alien and I hope my daughter never ends up with someone like that. You start a relationship on that foot and it is doomed from the start imo.

You don't go out for a meal and ask her to pay for the dinner to protect your "income" do you?

I completely disagree. If you are in a relationship where you can't have adult conversations about money & risk then you are doomed to fail.
All kids should be bought up with realistic expectations and an understanding of household finances.

Ref the OP:
Going to a solicitor is the right approach. You can do a deed of trust where you outline who contributed what and who will get what on a sale.

Things to consider in the 'who gets what' are future mortgage payment split & crucially any change in equity due to house prices going up or down (how do you benchmark.. because if purchase price then she benefits from increased value over your ownership so you may want to base it on current market value).

You also need to check on how enforceable they actually are, and write in safeguards on timescales for you to find the equity to pay her back (eg if securing a bigger mortgage was required it may take time).

Finally consider splits of furnishings, upkeep and improvements (split by equity % or income or 50/50?)


Don't listen to the naysayers, it can be a practical approach that you both benefit from if you do it right and go in with your eyes open.

 

[Kamakazie!]

This is a back of an envelope calculation so I might have things wrong...

If house prices rise over time (they are currently falling) then she would stand to make good money. Below is a very simplistic example without taking into account the interest payments.

Example if OP owns house without help from girlfriend:
House worth £400k today.
OP sells house in 10 years. Let's assume it goes up in value by 10% over that time and he's managed to overpay the mortgage enough to own it outright.
OP has 100% ownership of a house worth £440K. Happy days.

Example if girlfriend pays in money:
House worth £400k today.
Girlfriend pays in £45k (so now owns 11.25%)
OP sells house in 10 years. Let's assume it goes up in value by 10% over that time and he's managed to overpay the mortgage enough to own it outright.
OP has 88.75% ownership of a house worth £440K... which is £390.5k.
Girlfriend now has ownership of 11.25% of a house worth £440k... which is £49.5k so a profit of £4.5k (10%).

His girlfriend stands to win if prices rise, which typically they do long term. The OP pays less for the house overall but also makes less profit on the house and is potentially in a slightly worse position compared to buying it 100% himself. Obviously if they put this money into another house together there is an advantage for both parties. But considering more relationships fail than succeed then his girlfriend has a good upside and the OP has a slight downside if they split up.

As said, he also has paid £45k (+ compounded interest) less on the mortgage with which he can do other things.

In my view, ongoing mortgage payments (+ upkeep + improvement payment) would also be split the same as the equity so any gains or losses are split exactly the same way.

It's not particularly difficult to make it an equitable arrangement.

 

[adam cool dude]

I completely disagree. If you are in a relationship where you can't have adult conversations about money & risk then you are doomed to fail.
All kids should be bought up with realistic expectations and an understanding of household finances.

Ref the OP:
Going to a solicitor is the right approach. You can do a deed of trust where you outline who contributed what and who will get what on a sale.

Things to consider in the 'who gets what' are future mortgage payment split & crucially any change in equity due to house prices going up or down (how do you benchmark.. because if purchase price then she benefits from increased value over your ownership so you may want to base it on current market value).

You also need to check on how enforceable they actually are, and write in safeguards on timescales for you to find the equity to pay her back (eg if securing a bigger mortgage was required it may take time).

Finally consider splits of furnishings, upkeep and improvements (split by equity % or income or 50/50?)


Don't listen to the naysayers, it can be a practical approach that you both benefit from if you do it right and go in with your eyes open.

We have adult conversations about money. Everything is split down the middle 50:50. Even though I earn more I am happy with that. I am here to provide for my family and children. Might be old fashioned but that is how I see things. Perhaps why after 16 years we are both still happily together. It works for us anyway.