Joint mortgage, unequal deposit: who owns what when one of you pays more?

What happens to an unequal deposit when buying a house together?

If you buy a home in both your names with a joint mortgage and an unequal deposit, and don’t say who owns what, the law in England and Wales starts from equal shares. That is true even when one partner paid far more of the deposit. Living together, however long for, doesn’t change this: there is no such thing as common-law marriage. Fewer than half of the people we surveyed knew that.

The leading case shows how far this goes. In Jones v Kernott, decided by the Supreme Court in 2011, Ms Jones paid the whole £6,000 deposit on a home bought in joint names. The courts still started from the position that the couple owned it jointly. She ended up with 90% only because of what happened in the years after they separated, and even then the Court of Appeal said 50/50 before the Supreme Court restored her 90%.

The court set out the rules like this:

• The starting point where a couple buy a family home in joint names is that they own it jointly, in value as well as on paper.
• That can change if there’s evidence you both intended something different, when you bought or later.
• If a court has to decide, it looks at the whole course of dealing between you. Money paid in counts, but so do many other factors, so the result is hard to predict.

So when one partner is paying more deposit, the clearest way to make sure it’s treated the way you both intend is to agree how it works and write it down. If you’re wondering how to protect your deposit, that’s the answer, and it gives the partner who put in less the same certainty. Leaving it as “we’ll sort it out if it ever comes up” hands the question to a court later, which Advicenow warns is likely to be expensive and stressful, with an uncertain outcome.

Does a joint mortgage mean equal shares?

Not on its own. The mortgage and your shares in the home are two separate questions.

• The mortgage is a debt you owe together. If you’re both named on it, Citizens Advice says you’re both responsible for the payments, including any arrears, even if one of you moves out. That’s true however you split the deposit. Our guide to who is liable on a joint mortgage covers the debt side.
• Your shares are about the home’s value. They depend on how you own the home and what you recorded when you bought it, not on whose name is on the mortgage.
• With nothing written down, the starting point is equal shares. In Jones v Kernott, the couple shared the mortgage and upkeep, and Ms Jones paid the whole deposit. The starting point was still that they owned the home jointly. A court can move away from that only if there’s evidence you both intended something different, and the Supreme Court said that may be easier to show where a couple did not share their money.

So if you buy in both names with a joint mortgage and an unequal deposit, the starting point is equal shares unless you record something different. Both of you get certainty by agreeing it now.

What are the three ways couples split an unequal deposit?

For an unmarried couple with an unequal deposit, there’s no single right answer. Each of these is fair in its own way, and the best one is the one you both choose with your eyes open.

1. Equal shares. You own the home 50/50 and split whatever is left when you sell equally. This suits couples who see the home as a joint project, or where the partner with the smaller deposit is putting in more in other ways, such as more of the bills or time out of work for children. It’s also what happens by default if you record nothing.

2. Deposits back first, the rest split equally. When you sell, each of you gets your deposit back first, then anything left over is shared 50/50. Growth in value is shared equally and, as long as the home hasn’t lost value, nobody loses what they started with. It’s also simple to explain.

3. Shares in proportion to deposits. You own the home in the same ratio as your deposits, and everything, including any growth or fall in value, is split in that ratio. It rewards the bigger deposit most strongly, even though you usually pay the mortgage together.

How do the three options compare with real numbers?

Alex and Jordan buy a £300,000 home. Alex puts in a £40,000 deposit and Jordan £10,000, with a £250,000 joint mortgage. A few years later they sell for £330,000 with £230,000 of the mortgage left, so £100,000 is left over.

Alex and Jordan's £100,000 split three ways after selling

What they agreed	Alex gets	Jordan gets
Nothing written down, equal shares	£50,000	£50,000
Deposits back first, rest split equally	£65,000	£35,000
Shares in proportion to deposits (80/20)	£80,000	£20,000

How the middle row works: Alex gets £40,000 back and Jordan £10,000, which leaves £50,000. That is split equally, £25,000 each, so Alex ends up with £65,000 and Jordan £35,000. Compared with equal shares, that’s £15,000 more for Alex. In proportion, Alex gets 80% because £40,000 is 80% of the £50,000 put in.

Now say they have to sell after two years, for £280,000 with £240,000 still owed. Only £40,000 is left, less than the £50,000 they put in. Deposits back first can’t repay both in full, so you need to agree what happens. One simple answer, and the one our calculator uses, is to share what’s left in proportion to the deposits.

Alex and Jordan's £40,000 split if the home is worth less

What they agreed	Alex gets	Jordan gets
Nothing written down, equal shares	£20,000	£20,000
Deposits back first, shared in proportion if short	£32,000	£8,000
Shares in proportion to deposits (80/20)	£32,000	£8,000

Illustration only: these ignore selling costs, tax and who paid what towards the mortgage. Advicenow suggests allowing about 3% of what’s left for the costs of selling. Try your own numbers in the deposit split calculator, which shows all three splits side by side.

What about mortgage payments over time?

With a joint mortgage, you’re both responsible for all of the payments, including any arrears, even if one of you moves out. How you split the payments between you is up to you. Your shares are a separate question, and paying more of the mortgage doesn’t automatically change them.

So it’s worth deciding now, while it’s easy to talk about:

• Do unequal mortgage payments change your shares? Some couples say no, because the mortgage is a shared cost of living in the home, like rent. Others track it and adjust.
• What if one of you earns less for a while? For example during parental leave, illness or retraining. Some couples agree that shares stay the same, so nobody is penalised for a break.
• What if one of you stops paying? Agree what happens, and how long before it changes anything.

What about improvements, extra payments and family money?

Big one-off costs can shift the balance just as much as the deposit. A new kitchen, an extension or paying off a chunk of the mortgage from a bonus can each run into thousands of pounds.

For each, agree one of these:

1. It’s shared. It comes out of joint money, or you treat it as joint, and your shares don’t change.
2. It comes back first. The person who paid gets it back when you sell, like the deposit.
3. It changes your shares. You work out new shares and record them.

Keep receipts and bank records either way. They make any later conversation much easier.

If some of the bigger deposit comes from family, decide whether it counts as that partner’s own contribution, and whether it’s a gift or a loan that has to be paid back. Say so in writing, and tell your conveyancer about family money early. If the family expects the money back, get legal advice before you buy.

How do you record your shares so they count?

Recording your shares when you buy is the strongest step for the home itself, and it gives you both the same certainty. There are three pieces, and they work together.

1. How you own the home (the TR1 form). When you buy, your conveyancer helps you fill in the transfer form, called the TR1. Panel 10 says how you hold the home: as joint tenants, as tenants in common in equal shares, or on other terms, such as unequal shares. If you choose tenants in common, HM Land Registry adds a note to your title called a “Form A restriction”.

Topic	Joint tenants	Tenants in common
What you own	The whole home, together	Your own share, equal or not
A bigger deposit	Not shown in who owns what	Shares or a formula can match what you put in
If you split up	Usually half each	The shares you recorded
If one of you dies	The survivor gets it all, by law	Each share passes under that person’s will
Wills	Still wise for everything else	Needed if you want your partner to get your share

Our guide to joint tenants or tenants in common goes through the choice in more detail.

2. A declaration of trust. This is a signed document that sets out your shares, or a formula such as deposits back first. The law says a declaration of trust over land has to be shown in signed writing, and your conveyancer or a solicitor can prepare it when you buy. HM Land Registry doesn’t usually keep a copy, so keep yours somewhere safe.

3. A couples agreement. A written couples agreement (also called a cohabitation agreement or a house buying agreement) covers the things a declaration of trust usually doesn’t: who pays the mortgage and bills, what happens with improvements, what happens if one of you earns less, and who stays if you split. Courts can take an agreement like this into account, and Advicenow says they will usually follow one if it’s fair and you were both open about your finances, and even more likely to follow it if you each had independent legal advice, separately. See how your agreement counts and what a couples agreement for buying a house covers.

If you’ve already bought as joint tenants, you can change. Either of you can end a joint tenancy by serving a notice of severance on the other, with no HM Land Registry fee. But that gives you equal shares, not shares that match your deposits. To agree unequal shares after buying, you both need to agree, and it’s a good idea to use a solicitor.

When should you get legal advice?

A conveyancer handles your purchase and can record your shares. Think about separate legal advice, one solicitor each, if:

• family money is part of the deposit and the family expects it back or wants a say
• one of you won’t be on the mortgage or the title
• either of you has children from a previous relationship, or a business
• you already own as joint tenants and want to change to unequal shares
• you want your couples agreement made as a formal deed, which Advicenow says needs a solicitor
• either of you feels under pressure, or doesn’t feel free to say no

Advicenow puts solicitors’ fees for a living together agreement at £500 to £3,000 or more. If you’re separating now, speak to a family solicitor or a mediator before you agree anything.

What should you do next?

1. Work out the numbers together. Put your deposits and a likely sale price into the deposit split calculator and look at all three splits.
2. Agree the rules for the big things. The deposit, the mortgage, improvements, family money and what happens if one of you earns less. The free 10-minute conversation takes you through them side by side, and your answers stay on your device.
3. Tell your conveyancer early. Say whether you’re buying as joint tenants or tenants in common, in what shares, and ask about a declaration of trust.
4. Write it down. Put what you agreed into a couples agreement you both sign, and keep it with your declaration of trust.
5. Make wills, especially if you’re tenants in common.
6. Review it when something big changes, such as a baby, a pay change or a big improvement.

If you’re not sure the paperwork will count, read whether a couples agreement counts in court and what rights unmarried couples have. If you plan to marry, read getting married after buying a house, because a divorce court works differently.