So I am looking at buying a house jointly with my cousin. I have a higher income and better career prospects, they have a larger proportion of the deposit. Neither of us would be able to break into the property market on our own.
So when we come to sell the place in X (say 10) years, they paid the 3/4 of the (20%) deposit & I paid the 2/3 of the repayments. Also (hopefully) the value of the property has increased.
Now dividing up the place 3 parts to 1 (deposit ratios) does not seem fair. But dividing up 1 part to 2 (repayment ratio) also does not seem fair. Meeting half way just seems mathematically naive, especially considering the growth is leveraged.
We could get a property valuation every year and maths out each weeks repayments and work out the leveraged growth of each repayment + simple growth on the deposits. But that seems too complex and lead to different mistakes and interpretations (what happens if interest rates go up, what if growth is flat for a few years etc).
Given different deposits and repayment ratios what is a simple 'rule of thumb' way/formula to work out a roughly fair ownership in X years time, considering the leveraged growth in value?
Note: The ratios given are just examples, and to make the question reusable, one person could also be paying the lions share of the deposit and repayments.
For the sake of this question: Lets also assume that if we agree on this formula there will be no difficulties arising from going into an investment with a family member.
Bonus question: How would you account for one person living in the smaller room (or unit) of the property?