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My girlfriend and I are buying our first home together. As it stands, I'll be putting quite a large chunk of the deposit (roughly 70%) and I'll be paying about 60% of the monthly mortgage repayments.

Is there a convenient tool / method for calculating the equity split we get? I know it's not going to be 50/50 because of my larger contribution; I just want some way of getting a good idea.

from the comments: Yes, so we understand that there needs to be a written agreement drafted by a Lawyer. That much is obvious to us. I just want to get a feeling for how to calculate what the split will be in the agreement.

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    Just my 2 cents worth of personal advice: co-owning a home without sharing money more generally sounds like a Bad Idea to me. Sharing paychecks and bank accounts is much more reversible than sharing a house, and is a lower level of financial commitment. Have you considered having just one of you own the house, while the other pays some reasonable "rent" to help out with the payments? – Mike Haskel Sep 10 '16 at 17:12
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    What happens if she gets pregnant in few years, and takes off 3-6 months or more? She's likely to paid significantly less those months. Will you re-do the equity split? What if you end up out of work for a year? Modify the equity? If you're serious enough to buy a house together, split it 50-50, and don't worry about it. Or write a contract that the down payment amounts will be recovered from any profit on sale first, then split the rest 50-50. – mkennedy Sep 10 '16 at 18:34
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Note that the equity doesn't have to be directly proportional to the amounts each of you has contributed -- and depending on where you are and your particular situation that may not be the law's default. If you are at all concerned about the ownership -- and you should be -- sit down with a lawyer and put your agreement in writing. Otherwise what you assume is happening may not be what is actually happening... And having something like this to argue about makes both relationships and separation much more painful.

However, if that is the formula you want to use, it's straightforward: Track the totals of how much each of you has contributed to the purchase (and upkeep? You need to think about that) of the house. The ratio of your equity, under this system , is the same as the ratio between your contributions. One can work out a formula for that, but it's just as easy to work with the real numbers.

  • Okay yep, So that was exactly my thinking too. But I just wanted to make sure that there was no hidden stuff to come along and catch us out. My girlfriend and I are pretty set on keeping things a fair as possible, so in the unlikely event of a break up, there's no debate about who owns what. We get what we bought type thing. This answers my question, so happy to mark as an answer. Thanks Keshlam. – christopher Sep 10 '16 at 16:39
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    This is a contract. The division of equity is what the two of you agree it is. If you want to make it 50/50 despite the difference in contributions, it if you want to scale the contributions by what percentage if each person's income they represent, or anything else, that's up to you. Decide what you both consider equitable, and put it in writing. – keshlam Sep 10 '16 at 16:47
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    @christopher There is nothing fair or unfair. Its how both of you see it. One can purely go by contributions. It makes things simpler. One can also go by income. One can also bring in non tangibles. i.e. You can think, your girlfriend is getting to enjoy a bigger house by paying less. Your girlfriend can think she is supporting your dream of bigger house. – Dheer Sep 10 '16 at 17:48
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    Exactly. What is fair is what you two consider fair. – keshlam Sep 10 '16 at 18:34
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    @christopher - the whole scenario boils down to 2 issues. Putting the split details in writing. And having that split feel fair to both of you. There are issues when a couple have different incomes, or very different spending. That turns into a psychology question. I was fortunate to have a wife who averaged about 10% more income than me over the 30 years we worked together. I didn't judge her shoe or pocketbook purchases, she didn't judge my electronics. But we saved together right off the top. – JTP - Apologise to Monica Sep 10 '16 at 19:01

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