Q My fiance and I are planning to buy our first home. As he recently inherited a large sum of money he will pay the bulk of the deposit (about £80,000), while I have savings of £10,000 to contribute. We think we will need a mortgage of £50,000. He is about to start a degree as a mature student so I will cover the repayments (I am currently on a salary of £20,000 and in line for a promotion).
Although we plan to be together until death do us part, we would also like to be certain that, should we need to, we can divide our assets easily and fairly. Is there any way of monitoring the effect of interest and inflation on the proportion of the house we have each paid for? FR
A You don’t really need to monitor interest and inflation. If you were to go your separate ways the fairest way of splitting the sale proceeds would be in relation to your contribution to the house. So, assuming you buy a house for £140,000 (ie your two deposits of £80,000 and £10,000 plus the £50,000 mortgage) your fiance’s contribution would buy him a 57% share of the property. Your contribution – made up of your deposit plus the mortgage – would buy you a share of 43%, out of which you would need to repay the loan. However, for that to continue to be a fair split you would need to continue to cover the mortgage repayments without a contribution from him.
If you do not plan to marry soon, you may want to ask your solicitor to draw up a document outlining how much each party will be entitled to should you separate and sell the house – but if you do marry soon you dont need to worry.
