In this brief guide, we will cover what you should consider when moving in with a partner who has a mortgage.

What to consider when moving in with a partner who has a mortgage

When moving in with a partner who has a mortgage there are some considerations you need to have taken.

You may want to consider if your rights differ as a cohabiting couple from those of a married couple.

When you move into your partner’s house but aren’t married this is known as cohabitation.

What is cohabitation?

Cohabitations is when you live with someone you aren’t married to. When cohabiting you will have different rights than someone who you are married to. Your rights will also change depending on if you have children and how old they are.

The rights each of you have will also depend on if you are both in the mortgage agreement or just one of you.

When you move in with a partner who has a mortgage you have no rights or claims over their mortgage and if they die you will still have no rights or claims over their mortgage except they have stated so in their will.

Becoming a joint owner with your partner after moving in

The only way you can have any claim after moving in with a partner who has a mortgage is to ask them to be joint mortgage holders.

To do this the mortgage lender will also have to agree to it and may need to perform a mortgage affordability test on you to see if you would be able to keep up the monthly mortgage repayments should anything happen to your partner.

This may not be the only basis on which they will add you as a joint owner as they may still add you as a joint owner on the property if your partner is still able to maintain the monthly mortgage repayments.

When you transfer a property or add someone as a joint owner there may be some tax implications and you should seek tax advice on this.

When you become a joint owner you could either own equal shares as your partner or have unequal shares based on what you decide.

You and your partner will both have to seek independent legal advice when becoming joint owners.

In some cases, your partner may not want to add you to the mortgage on their property. 

Both parties should still seek independent legal advice when someone moves in with their partner who has a mortgage.

What you should consider when you move in with a partner who has a mortgage?

When you move in with a partner who has a mortgage or your partner moves into your home and you have a mortgage you should obtain a cohabitation agreement to govern the parties’ respective obligations and interests in the property.

Cohabitation agreements work based on trust laws and you must be very careful not to fall into any trusts you didn’t intend to.

If your partner pays for the mortgage or pays for home improvements which have increased the value of the property then they may have an interest in the property.

A cohabitation agreement will go a long way but may not solve every problem. 

You should ask your solicitor any questions in regards to specific issues that may concern you and get thorough advice.

What to consider when living with a partner who owns the house

Typically when you and your partner live together but they own the house you will usually have much fewer rights to live in the property than if you were their husband or wife, a civil partner or had a joint mortgage.

There are several other things you may want to take into consideration when living with a partner who owns the house.

We have already highlighted the need for a cohabitation agreement and seeking legal advice.

A few other things you should know:

  • Although you may not have cohabitation right sin the property if you are living with a partner who owns the house, you could still have a beneficial interest in the property if you have paid rent, paid towards the mortgage or paid towards renovation costs. You may, therefore, be able to claim against the value of the home and any subsequent rise in equity sine you have resided at the home. This will not give you the right to reside in the property.
  • You should ensure whatever agreements you come to are put in writing.
  • You should consider drafting up wills so if you died the shares in your property will go to the appropriate person.
  • Moving in together does not mean you have a common-law partner or a common-law marriage. You will not have the same rights as a married couple.
  • You could force your partner to sell the property in order to recoup your beneficial interest when you leave the property or split up.
  • You may be able to claim any beneficial interest you have in the property if the property is sold.
  • The level of beneficial interest you could claim will depend on what sort of contributions you made. Were these contributions towards the mortgage deposit, the monthly mortgage repayments, renovation costs or utility bills.

In this brief guide, we covered what you should consider when moving in with a partner who has a mortgage.

If you have any questions or comments please let us know.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.