Mathematicians in here please

Soldato
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(I didn't think I'd get a good response in GD, so hopefully there's some mathematicians in this forum too that can help!) lol :o

Ok, so my partner and I are buying our place as tenants in common as we are not married, but are putting in quite different amounts into the deposit. Having thought we'd sorted all of our sums we're now unsure if we can simply say person A gets X% and person B gets Y% as the solicitor has simply requested. Not sure the maths works as although the deposit amounts are quite different, the mortgage will be split 50/50.

So, changing all the numbers involved to save blushes, let's say for example we're putting down a 30% deposit which is split 75/25% between us. The mortgage and any overpayments will be paid 50/50.

In other words;
For the first 30% of the price of the property, person A receives 75% and person B receives 25%. For the remaining 70% of the property, this is split 50/50.

My question is; is it possible to turn that statement into a single percentage each? I don't think it can be done, but I failed maths A levels twice lol :confused: :p

Thanks!
 
Soldato
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Woa, couldn't imagine having to be this letigious with my wife (who was my partner when we bought our first house together).

If you break up - she'll get half either way. :p
We're both in agreement that it's a lot of money involved and there's no harm being sensible just to lay this all out properly. We have to do the tenants in common stuff anyway.. :)

From my understanding, person A: 0.3*0.75+0.35 = 0.575

Person B = 0.3*0.25+0.35 = 0.425
Erm, could you explain your working please? :p
 
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The way you've written it seems perfectly clear and sufficient to me.

"For the first 30% of the price of the property, person A receives 75% and person B receives 25%. For the remaining 70% of the property, this is split 50/50."
 
Soldato
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Sure :)

Person A would own 3/4 of the first 30% (0.75*0.3) and then the remaining 50% of the 70% (0.35)

Person B would own 1/4 of the first 30% (0.25*0.3) and then the remaining 50% of the 70% (0.35)

Hence:

Person A = 0.575 or 57.5%
Person B = 0.425 or 42.5%
Thank you. I've put it into our spreadsheet (with the real numbers!) where I've got workings the original way (well, my noddy method) and confirming that against the final percentage your method gives us. And yes it seems to give the same final amounts due each of us via either method. Although bizarrely it doesn't work for the price we've paid? Not sure what I've done there :confused:

The way you've written it seems perfectly clear and sufficient to me.

"For the first 30% of the price of the property, person A receives 75% and person B receives 25%. For the remaining 70% of the property, this is split 50/50."
So which would be clearer, writing it this way or writing a single percentage as per @MrRockliffe 's workings? I guess we could ask the solicitor...
 
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What do you mean by it "doesn't work" for your price? The explanation from MrRockliffe above makes sense to me.
The percentage ownership between you and your partner don't change over time, only the percentage ownership split between yourselves as a couple and the mortgage lender (which are irrelevant).
 
Soldato
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The percentage doesn't change over time. I can put any house value in that spreadsheet and the percentages don't change.
This is what I can't get my head around. Surely if the mortgage is always paid equally then the person with the lower deposit is increasing their share of the total price more than the person with the bigger deposit? :confused:

What do you mean by it "doesn't work" for your price? The explanation from MrRockliffe above makes sense to me.
The percentage ownership between you and your partner don't change over time, only the percentage ownership split between yourselves as a couple and the mortgage lender (which are irrelevant).
I think it didn't work against the price now was because we rounded slightly on the percentage that the deposit is. No matter!

Anyway, is this actually the fairest way to do this? Most things you read online are just like "yeah just get back the deposit each party paid in and split the rest 50/50" but that means the person who put the bigger deposit in loses out - because their money doesn't realise any of the potential gain e.g. should it have been sitting in an ISA at a glorious 1% interest! Both parties lose out that way, just the bigger deposit loses out more. Right?
 
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Don
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Anyway, is this actually the fairest way to do this? Most things you read online are just like "yeah just get back the deposit each party paid in and split the rest 50/50" but that means the person who put the bigger deposit in loses out - because their money doesn't realise any of the potential gain e.g. should it have been sitting in an ISA at a glorious 1% interest! Both parties lose out that way, just the bigger deposit loses out more. Right?

It depends on the person. I went in with the lions share and did how you described and said 50/50 after the deposit. We've just put an offer in on a new house after 11 years together and it's now just a 50/50 split.

Thinking of it as 'losing out' smacks a little to me of greed IMO. House prices will gain (in the most part) more than any savings unless you luck out on a crypt o or something. and the two of you together can help realise that much quicker than just one getting on the ladder, so together you're better off.

Then again for me, my mortgage was quite small (100k or so) so the deposit wasn't immense. For you, you could be spending ten times that, and in that context it's more to think about.
 
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This is what I can't get my head around. Surely if the mortgage is always paid equally then the person with the lower deposit is increasing their share of the total price more than the person with the bigger deposit? :confused:
Yeah from 25% to 42.5% vs from 75% to 57.5%.
The missing part of the calculation is how much mortgage you owe when you sell. That would be repaid at 50/50 presumably.
This is a reasonable way of doing things, but if there are kids involved it goes out the window.
 
Soldato
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This is what I can't get my head around. Surely if the mortgage is always paid equally then the person with the lower deposit is increasing their share of the total price more than the person with the bigger deposit? :confused:

I think it didn't work against the price now was because we rounded slightly on the percentage that the deposit is. No matter!

Anyway, is this actually the fairest way to do this? Most things you read online are just like "yeah just get back the deposit each party paid in and split the rest 50/50" but that means the person who put the bigger deposit in loses out - because their money doesn't realise any of the potential gain e.g. should it have been sitting in an ISA at a glorious 1% interest! Both parties lose out that way, just the bigger deposit loses out more. Right?

So we can deduce that your putting in the biggest deposit then....
I didn't even consider this buying a house with my wife and we're now onto our third property and we've never gone back and revisited exactly who put in what deposit and what the potential loss on savings interest was...
Tbh, just get it bought, if it goes sideways both take back your deposit and split the rest and get on with your life
 
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Tbh, just get it bought, if it goes sideways both take back your deposit and split the rest and get on with your life

This, but definitely put it in writing.
I bought with my partner nearly 2 years ago, I put in nearly 50% of the house value as a deposit and we spilt the mortgage 50/50. Went 50/50 on the deeds as well.
She's now leaving and although she says she only wants half of what she's put in, it's a nerve wracking time for sure.
 
Soldato
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Anyway, is this actually the fairest way to do this? Most things you read online are just like "yeah just get back the deposit each party paid in and split the rest 50/50" but that means the person who put the bigger deposit in loses out - because their money doesn't realise any of the potential gain e.g. should it have been sitting in an ISA at a glorious 1% interest! Both parties lose out that way, just the bigger deposit loses out more. Right?
It's probably fair at the beginning, short term. After a few years, you'll both have put more into the running of the house than just deposits and repayments, so to hold the 'investment growth' of the deposit so rigidly isn't going to be fair any more, imo.
 
Soldato
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50/50 once each party has their deposit returned. I hate to see what you pair are going to be like when you have to buy your first pack of binliners.

You're really making your simple house purchase with a quest to complete by June massively overcomplicated.
 
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