Girlfriend potentially moving in to my house in about half a year. I own my own house (though am paying a mortgage). What should she cover when she moves in?
Currently live in a high cost metro area. I live solo and own a house with three bedrooms - girlfriend currently lives in a group house with a lot of people, so her rent is really cheap. She'll get a lot more space and only be living with me.
I make about 90k and she makes about 50k. I have student loan debt and the mortgage (she doesn't have any outstanding debt). My overall mortgage is roughly $1900 a month.
I am thinking that it would be fair to have her pay rent that reflects her percentage of our combined income. (so, i would pay 2/3rds and she would pay 1/3). And split the utilities. Does this sound fair? (most of my monthly payment goes to interest since i just started a 30 year fixed mortgage, so it's not like it's all equity, either)
What's her current rent?
posted by j at 7:07 PM on January 29, 2012
I don't think it's fair to ask her to pay out based on your income percentages because in the end, the house is in your name. Yeah, she's just helping you mostly pay interest right now, but that really doesn't matter. She should pay *something,* definitely, but 1/3 of $1900 is a lot for rent in which she doesn't have the benefit of building equity. My income is not quite $50,000, and I wouldn't want to pay $633 just for rent before utilities or anything.
Have you guys talked about her chipping in, her responsibilities toward payment and chipping in for increased utilities? How does she feel about a big increase in housing costs?
I don't know if 1/3 of your mortgage as rent is fair. If it's a lot more than her current rent, it's probably not fair. Yes, she'll have more room- more room then she might need (three bedrooms for 2 people sounds like a lot to me). It's not like she can say, hey, let's move somewhere smaller and less expensive, because you own the place, you can't just up and move. Plus, you own the place, and always will- if she moves out after months/years of paying more than she might have elsewhere, all that equity is yours, she has nothing.
What TPS said. You're not just getting a place to live--you're getting a tax break and you're building equity. She's just getting a place to live.
Maybe checking Craigslist to see what people in the area are paying for similar home shares with people who are not their romantic partners is one way to get some additional datapoints.
"What I'm paying now is mostly interest" is a total red herring, as you would be paying the same interest whether she was living with you or not. Paying interest is part of the process of building equity in a home.
How about whatever her current rent is, plus whatever she currently pays for utilities.
It doesn't seem like half the utilities is fair, because even half of a three bedroom house is more than she actually needs; she should not be paying more than she needs in utilities just because you happen to own such a large house.
Paying what she currently pays seems reasonable, and fair.
I also think you should not play landlord to your girlfriend - because that's what you'd be in this scenario you are proposing.
I'm sure she's keen to contribute. Why don't you ask her what she thinks is fair?
Keep it casual. Don't be too wrapped up in her answer. I think you should graciously and happily accept whatever offer she makes, then count yourself lucky someone loves you enough to want to live with you.
We're you ever gonna rent out any of e extra bedrooms if she wasnt moving in? If yes, then you should average her current rent with how much money you'd get from tenants, or something like that, since you'd be losing money if she only paid a small amount and you couldn't rent out the rooms. If you were just gonna live in that house alone and pay your mortgage alone until you got married or were serious enough to add anyone to the mortgage, then just think of her small addition as a bonus, since you would be paying all that money anyway.
A proportional share of income (when you are purchasing the house and she is just living there to be with you) seems high to me.
How much are utilities?
Were, not we're. Damn iPad.
Ask her straight up what she thinks is a fair contribution, and then that will be what she contributes.
If this were me, the "ask her what she thinks is a fair contribution" would drive me crazy, because I'd feel like I'd have to guess what you think is fair.
I'd say something influenced by these three factors:
1) proportional to your incomes as you suggested,
2) market rent for one of the three bedrooms in your house, if you were to rent one
3) what she's currently paying
Can you get a middle value from that?
I definitely agree that your girlfriend's view about what is fair should count for more than the internet's view of what is fair here. If the "building equity" thing seems unfair to her (I assume you're not giving her a percentage of equity in the house!) then what about an income-based split on the fraction of your mortgage payments that represents interest?
Also, keep in my mind that this is probably part of a bigger picture question about how you're going to share finances more generally-- on food, going out, household supplies and repairs, etc.
If you want her to live with you, why should she have to pay anything? She could cover groceries or whatever, but if you two are going to bicker over money and you're going to feel like you should be getting money for her living with you, maybe moving in together isn't a wise idea.
When my husband and I were first engaged and I moved in with him into his place, he covered the rent. We had an account for joint savings, but I can't imagine bickering over "she owes me this and he owes me that," in a serious relationship that is actually headed somewhere. In fact, he wouldn't have been like that even while dating, especially since his income was higher than mine and he had rent covered anyway.
I like mercredi's answer. The obvious potentially fair baselines are:
These should set the upper and lower bounds for the number here, i.e. it shouldn't be higher than the highest number (presumably proportional income) or lower than the lowest number (presumably her current rent).
If I had to fix a number within those upper and lower limits, I would consider the other factors going into this move. Does she want more space? Would you otherwise be renting space out? What are your student loan payments and what can you each afford? If she is the one who benefits from this move, you have the negotiating power and the number is closer to the upper limit. If you are the one who benefits from the move, she has the negotiating power and the number is closer to the lower limit. If you both benefit about equally, split the difference.
(This is basically an oversimplified application of how juries determine what a reasonable royalty is in patent infringement cases. I kind of like it here. The idea is parameter-setting and shifting within those parameters.)
Years ago, I would have thought that your proposal was pretty fair (and it may still be). I had a friend who lived with her boyfriend. They both had good incomes, minimal debt, and good credit. After being together a few years, and living together in a rental unit, the boyfriend decide to buy a place. I think that they had played with the idea of getting a place together, but for whatever reason it was jointly decided that he would buy the place. She split the mortgage payment with him. Far as I know they may have come to this agreement mutually. At the time although they weren't married, my friend thought that they were either going to get married at some point down the road or at the very least continue living together as a married couple long term. Five years later, they break up, she's contributed approximately 40K - 50K toward his condo and has nothing to show for it. So now, I'd caution anyone in your girlfriend's position to think carefully before entering into such an arrangement.
I don't know what the fair arrangement is, because if you two weren't dating and she was just renting a room from you then of course she'd pay rent without getting any equity in your house, but the relationship makes things a bit messier. Maybe she could pay for all the groceries and utilities rather than rent? I also agree with others that asking what she thinks would be fair is also a good idea.
anniecat's comment strongly resembles my very happy amazing marriage.
Your question is more in the vein of my first very serious relationship that resulted in marriage, and then divorce.
I agree if it is going somewhere, then it's going somewhere. Sure there's different ways to handle this, for sure - but defaulting on the side of generosity with someone you trust enough to live with is the way to go. Especially since you own the house and will enjoy the long-term benefits of said ownership if co-habitation doesn't end in marriage.
You're currently paying it all yourself. So you don't NEED someone to help out. Your girlfriend moving in is a good thing, yes? So. carry on paying for it yourself, and she can cover some other stuff. Pay for groceries, utilities, whatever. You get to live with your girlfriend (yay!) and save money on stuff you're currently paying for (aforementioned groceries etc. yay!) while paying off your house. She gets to live with you (yay!) and save money on rent (yay!).
An ex-girlfriend often used the phrase 'it'll all come out in the wash' when talking about expenses. In the end, it doesn't really matter. There's no absolute 'right' amount that she should be paying, so there's no real way of saying who ends up 'better off' - in fact, framing the decision that way is a great way to make it a problem, rather than something good for both of you.
DO ask your girlfriend what she thinks is fair.
And here's another perspective. I once rented a room in a house where the homeowner also lived, along with one other renter. We all paid 1/3 of the rent, and he covered any odd amount of utilities. Yes, he got all the equity, but he had the capital to buy the house and maintain it, and we didn't, and we all understood the role going in. The rent was under market rate anyway, so we were all happy enough with this arrangement. We can all understand that landlords rent their property as a source of income, that that alone is why the property is even available to live in.
But I wasn't his girlfriend. I have never lived with anyone as a partner who was the homeowner; I've always rented. And we've always done a proportional-to-income split to share the rent. And we do have to conversations about who owes who what, just to make the budget work. Sometimes I front his share of rent if something's going on with cash flow, and then he picks up some extra utilities. Sometimes he fronts because I just made a tuition payment and am broke, and I make it up later. I keep a detailed budget so this can be tracked. I don't find it unromantic or anything, it's just survival.
If I were in a situation like your girlfriend's, I would really want to pay something. I would not want to live there without contributing to the household. But since you bought the house yourself, have the equity, and it's in your name only, maybe rent isn't the right contribution. If you had already paid it off when you met her, would this question even arise? I think having her pick up certain bills for things she enjoys the use of - cable TV, internet, electricity, etc - and a certain amount of groceries and entertainment expenses and maybe purchases for the home - makes sense. These will be real contributions that will offset your household budget. But they should more than make up for her added presence which will mean the household consumes more food, water, and energy.
If I were her, I would absolutely want the role of contributor, because I would be allergic to any sense that I was coasting or freeloading. I believe in contributing to my own support. So do consider an arrangement that gives her this sort of emotional equity in the household, but unless you plan to put her name on the mortgage, I agree that maybe rent isn't what she should be paying.
If you were to marry (her or anyone else), would you expect them to buy out your share of the house?
seriously, the best answer imho so far is, ask her to pay whatever she was paying in rent and utilities to live at her last place to you instead. you get free money, which is all win for you - you were paying everything on your own up till now after all. and she doesn't feel like she's having to pay through the nose for the pleasure of moving in with her boyfriend, she doesn't have to re-think her budget, or resent you for making her more poor. this last part will absolutely help the relationship do better if it's "going somewhere". on the other hand, if you do wind up splitting up at some point down the road, neither of you will have cause to feel like she was unfairly contributing to paying your mortgage for no return - after all, she was paying exactly the same to pay off someone else's mortgage before she moved in with you, with no reason to feel she deserved some share in the equity of that particular shared rental unit either.
of course, asking her opinion on the subject is crucial, but i'd bring the above suggestion as your first idea if she asks "well what do you think"
If you;re going to split the mortgage/rent according to income, it might be a good idea to offer her a share in the equity. However, it might also be a good idea to figure out what sorts of expenses (including capital replacement and insurance) are incurred, and see if she would contribute at the same ratio as her share.
However, the only emotionally healthy scenario is one where she feels that the house is her home, and that there are no undiscussed issues about who is supporting who.
posted by KokuRyu at 9:04 PM on January 29, 2012
I'm currently doing the same with my boyfriend - bought a house, invited him to move in with me. He pays me rent at a rate that's equal to the current rental rate for the area.
It's not proportionate to either of our incomes. Bills and groceries are separate on top of that as well.
Think of it this way: if by some chase you do break up, she's not out of pocket anymore than she would have been paying rent anywhere else, and to your benefit, your partner won't have ANY legal claim on your house.
And, as unsexy as it sounds, get a signed rental agreement between the two of you.
I think she should pay the rent she previously paid, plus her share of the current utilities (split according to income). That means she pays a little extra (in utilities) to reflect the fact she is now in a better living situation (more space, fewer people), but her costs don't rise so much that she feels like it's unfair that you are building equity off her back or that she is having to pay more than she would prefer to if you weren't tied to this particular house.
If you guys were both renting and decided to move in together, you'd probably find a place together, she'd have input into what you chose, and she would be able to suggest somewhere smaller and cheaper if she preferred. She doesn't get to do this because of the fact you own this house, so her contribution should reflect that lack of choice.
I also think you should not play landlord to your girlfriend.
Please decide in advance if you want a lover or a tenant, because the two really, really don't go together. Once you know which you want, forget about the other one.
If you really want "rent" from her, the only relationship-friendly way is to ask her what she thinks is fair, as others here have suggested, and then accept that.
(Because really, if she's the kind of person who's out to rip you off, why are you living together anyway, right?)
If you (God forbid, knock on wood, etc. etc.) break up, are you willing to refund her money since she is paying into a house? If not, she should be covering part of the price of utilities and food. That's probably it.
I agree with others, talk to your girlfriend about what she thinks would be fair.
If you want to live with her because you need a roommate to share expenses, then you should charge her a fair market rent with a full, signed lease agreement between you spelling out the details of your contractual relationship.
If you want to live with her because you're in love and want to "take your relationship to the next step", then you should not be "charging her rent" at all - only working out, together, a solid and fair way for the two of you to keep the household going smoothly.
If you want to take that "next step" while simultaneously building resources for a shared future, then you should both be contributing mutually agreed amounts to an account in both your names, with an explicit signed agreement for fair division of those funds if things don't work out between you.
But if you can't discuss this situation openly and honestly with her, and get a true sense of her feelings on the matter (as well as her level of personal and fiscal responsibility in general) then you need to not have her moving into your home.
Regardless of your intent, regardless of your level of practicality, if the two of you are not 100% on the same page from the beginning, this will not end well.
I would think Income levels is actually a bad basis for the split. It should really be based on the Market Rate for Rent.
Its a 3 bedroom - so what is the split of Usage of the Bedrooms? I think its fair to charge her either:
a) the market rate for renting a bedroom in a share house, or
b) possibly IF she has her own room as well then you should calculate the Potential Rental for the entire house, then she should pay half of that. (I assume that would be LESS than your mortgage).
Really the rent should not have any reference to your mortgage repayments as she has perhaps little expectation that she will ever benefit from ownership of the house. As mentioned previously, that your payments are mostly interest is of no-consequence. that is the cost of your loan, its your issue.
posted by mary8nne at 4:24 AM on January 30, 2012
Why not charge her half of her current rent? As a couple, you two are generating $X in savings because she's moving in with you. Split it 50-50.
Charging market rates, so you end up with a huge financial benefit from the situation while she is the same or slightly poorer, seems a little heartless.
But I agree you should ask your gf.
posted by _Silky_ at 5:06 AM on January 30, 2012
The 2/3 - 1/3 split seems reasonable. But really, it's what you both consider fair. If things get difficult between the two of you, you don't want to face either you feeling like you're supporting a freeloader or her to feel like she's carrying a disproportionate amount of the financial load.
One thing to consider - if you're going to end up living together for a long time in an unmarried state - is whether she is contributing to the equity in the house. Particularly if income from her contribution lets you pay down the loan faster. If y'all are just moving in, it's probably too soon to consider it, but you
might want to make an agreement to reevaluate in N years or before getting married, whichever comes first.
It's a negligible contribution to the equity now, but if y'all are together for a long time and/or property values go up, it may begin to matter, so talking about it and coming to an agreement about it is something that should happen as the relationship becomes more serious and more long-term. There are way too many stories of unmarried couples living together where the house is only in one person's name, and when that person dies, the non-titled partner gets screwed over. (admittedly, this is mostly something I've seen in the gay community, where there aren't the same kinds of legal protections or recognition for unmarried spouse-equivalents)
I am thinking that it would be fair to have her pay rent that reflects her percentage of our combined income. (so, i would pay 2/3rds and she would pay 1/3). And split the utilities. Does this sound fair?
Yes. I don't know why people are bringing her current rent up; it's irrelevant. When you move in together, fairness means withing the terms of the relationship. I did very little cleaning when I was single and living with other guys, would it be "fair" for my wife to do all the cleaning, since I never had to clean before?
If she cannot actually afford the split you are thinking of, that's a seperate issue.
I am separating, so it's a bit late for me, but I am going to be working with accountants to try to retroactively figure out non-capital contributions to the household and what they're worth regards long-term equity and other shared or household assets to be figured on or near actual move-out and sales of house days.
Threads like these, I think, close in 30 days, and it's likely to take longer than that for all of this to get settled. So if you want to keep in touch, do. My e-mail address is in my profile.
posted by kalessin at 5:58 AM on January 30, 2012
Small claims courts are filled with ex-couples who decided to "play house" long before the relationship was solid. They had sloppy ill defined financial entanglements as part of playing house and then they find themselves asking a court to fix it. Of course, the courts can't and won't fix it. I have no idea what your relationship is like but you should enter this new living arrangement with one of these dispositions:
1) Have her pay rent (whatever amount you agree on) and 50% of the utilities. Just because you asked her to live with you doesn't mean she gets to live for free. Have a rental agreement (like a month to month lease if needed) to make it official. That way you all know where you stand. This might not be romantic but neither is bickering about money before a judge.
2) Welcome her into your home. Ask her to pay/contribute whatever she thinks is fair. Keep it loose and unofficial. But only do this if you are really OK with her not pulling her weight. I can imagine a few months in she says something like: "Hun, I am a bit short this month so I can't pay the rent". And then that starts to happen more frequently until you are pretty much paying everything as you do now. And if you are not OK with this, truly, deep down, your relationship will be over soon enough anyway. You must be truly OK with that scenario and don't expect to recoup any of that money. Ever.
Take your pick.
Get out your mortgage documents and look at the page where it says "when this mortgage is paid off, you will have paid $100,000 in principal and $125,000 in interest." Take the ratio of the two (4:5) and divide the monthly payment by that. ($1520) This removes the portion of the monthly payment that benefits you, and leaves only the cost of having this house available to you.
Then, if you really want to get picky, take the amount of interest (and property taxes) that you deduct each year from your taxes and subtract the standard deduction from that. This is the extra amount you deduct from your income because you have a mortgage. (Say you deduct $10,000 and the standard deduction is $8000. That leaves $2000 extra that you get to deduct from your taxes.) Then take that and multiply it by your top marginal rate (supposing it is 25%, you end up with $500 in free money that you get for having a mortgage). Divide that by 12 and subtract the $42 from the $1520 from above, leaving $1478. Split that evenly.
posted by gjc at 6:39 AM on January 30, 2012
I live with my partner and he owns the house, and has a mortgage. Currently we pay equal shares of the utility bills and I pay him, each month, about half of the value of the mortgage interest monthly payment. That way the cost of living in the house is more or less equal to us both (although he generally pays for any maintenance costs, house insurance etc, since the house is his), and any of the mortgage capital he pays off is up to him, and is separate to the interest which we cover between us (hope that makes sense).
At some point we will most likely be moving to a place we will buy together, or I will buy into a share of the house, but for now this works fine for us.
What superawesomebestgirlintheworld and I did when we shacked up was - owner covers the mortgage, non-owner covers the utilities (gas, electric, water, garbage, cable internet).
Comes out with non-owner paying less but it seems fair to us. We didn't consider any income based ratio. It's more of an emotional equity thing in our relationship.
Remember - at least in our relationship this is not so much an economic thing as it is based on our unwillingness to live apart.
I would add that what I pay monthly is, if anything, less than I would have to pay to rent my own place or even house share, so I never feel like my partner is "making money from me" or "playing landlord". I would advise that it might be best for her living costs not to become more expensive for moving in with you.
posted by lizabeth at 7:09 AM on January 30, 2012
Yeah, money and issues around it are so often a huge root cause of problems in relationship -- it's not so much what people on the internet think is "fair" as what feels "fair" to both of you. It's not fun to think "hey, what if we start hating each other" when you're just moving in, but think "if we were breaking up, would I feel like I'd been taken advantage of or screwed over?" And don't be afraid to re-evaluate it, either, after a few months.
posted by rmd1023 at 7:34 AM on January 30, 2012
Quick question if you moved theoretically into your gf's place for some reason and kept the place you are buying as an investment would you expect her to pay a part of the mortgage? Should she help pay your car payments too or pay your credit cards? If the answer is no then why should she pay part of the mortgage just because she moves in with you. You could charge her a nominal rent towards maintenance and upkeep, I'd look at what someone would pay to live in a share apartment of similar value to get an idea of what was fair, and go halves on the utilities, groceries etc.
As an example. I owned a house when I first met my husband to be, I paid the mortgage while we were dating and getting to know each other. I moved to the US to be with him but wanted to keep my house so I paid the mortgage while visiting him. I married him but kept the house in my name as per a pre nup (my mother needed a place to stay so we couldn't rent it out and I wanted her to be secure) so I paid the mortgage. My mother moved into an apartment, I sold the property and we used the equity from that to buy a house together in the US. We pay the mortgage on our new property out of our joint account.
Basically a lot of this depends on where you are in the relationship scale. If you are still at the "trying each other on for size" side then the mortgage is your responsibility as the property is yours.
Judging by the comments, anniecat's suggestion of the girlfriend not paying apparently works for some people, but I have a loved one (let's call this person "Pat") who owns a home and whose SO lives in the home without paying rent and it is a CONSTANT source of friction for them. Pat complains constantly that SO doesn't care about the house, which seems entirely reasonable to me since SO has no skin in the game as far as the house goes. However, this situation has been going on for many years now, so I guess it's not a dealbreaker. It does make me want to strangle Pat and the SO on a regular basis.
posted by mskyle at 8:41 AM on January 30, 2012
I own a house and if I had an S.O. moving in with me, I'd just expect him to pay slightly less than market rate for a single room in a shared house (which would be about $400 in Toronto), and for his share of the groceries and anything else extra that he wanted, such as cable, which I don't currently have. That $400 would be gravy for me, allowing me to pay my mortgage off faster or pay for a new furnace or build a deck or some such, and a good deal for him, allowing him to live in a comfortable house and save more money than he would if he were renting even a one-bedroom by himself, which in Toronto starts at over $600 for a one bedroom basement apartment with 6' ceiling clearances.
I think you should be aiming for win-win. Forecast some different scenarious: whether you stay together for the rest of your lives or whether you split up in a few months, a few years, or a few decades, will you both be happy with this arrangement?
Hmmm, my partner moved into the house I own last summer. He definitely pays rent. I'm surprised by all the comments saying the one moving in shouldn't pay rent.
He pays me about half of what he was paying living on his own, plus a portion of utilities and groceries (about 1/4 because there are 4 of us). In the end we both have lowered our expenses and we both feel comfortable about the amount. We split the cost of things we buy for the house (furniture, plates), but I pay for anything that counts as an "improvement" (Home Depot, plumber, new floor).
The equity question has never come up for us. I worked hard and saved to buy the house, and it's mine. If he also owned a house and sold it to move in with me, I wouldn't have a claim to his earnings. Nor should he have a claim to mine should there ever be any. We're not getting married so assuming we stay together, he could buy investment property down the road with the money he's saving over market-rate rent. It's win-win the way we've done it, and we're both happy with it. If we were commingling our finances, we would do it differently, but neither one of us wants to do that.
I've lived with 3 boyfriends in the past. Two owned a home. I gave money whenever. I usually paid for groceries, utilities, clothes, household stuff, did the laundry and dishes. They paid for their own house stuff. I guess I would find it a little strange if I were to move in with an SO and they gave me monthly rent and due dates and stuff.
My current arrangement is living with my boyfriend and we rent. I make more money than him and I have no clue what we each pay in bills. He takes care of the care since it's in his name. and I usually take care of the rent. Other than than that - beats me. Sometimes I pay utilities if I'm driving by the place. sometimes he does. Sometimes I'm short on money, sometimes he is.
No big deal. Everything gets paid.
posted by KogeLiz at 9:33 AM on January 30, 2012
eh, care not CARE
posted by KogeLiz at 9:34 AM on January 30, 2012
From the OP: Thanks for the feedback everyone! I've asked this question of friends IRL and i've gotten as wide of a variety of answers from MeFi as I did from them.
So I actually had talked to the gf about this beforehand, and she had been comfortable with the idea of the 1/3 and 2/3rds split, which she felt comfotable with because it gave her a lot more room and far less people living in one house (1 versus 6 others). And unlimited access to my car (she doesnt have one)
The reason I wanted to ask MeFi was that I did get a lot of varying opinions on this when I asked friends, although the consensus from impartial friends and acquaintances was on the income split idea.
But hearing other people's past experiences with rent-sharing and homeownership is really helpful too, because it really helps me see what potential issues could come up even when the situation seems ideal from the beginnng. posted by mathowie at 9:37 AM on January 30, 2012
Don't forget that you might have to legally report any rent you get from her as rental income.
Orange Swan said it best: "you should be aiming for win-win." Sounds like you got there--awesome.
This is also why I couldn't disagree more with spaltavian: thinking about what the move will feel like from the other person's point of view is thinking about this from within the relationship, and that includes thinking about what any increase or decrease in rent will feel like.
posted by _Silky_ at 2:16 PM on January 30, 2012
Look at Craigslist for a place in your area that is comparable to your house that is a 2 bedroom. Or look at 2 bedroom apartments that you could see moving into if you two were going to rent a place. Figure out a price range and then half that. If 1/3 is less do that I actually think 1/3 is good also as that would theorectically be pretty close to what she'd expect to pay for renting a room in your house. Although there are a ton of variables that could make that untrue.
posted by whoaali at 3:34 PM on January 30, 2012
Another point that has occurred to me since I posted:
Living with someone else is a pooling of resources and therefore almost always more economical than living apart. So if someone were moving in with me it would be unfair of me to expect him to pay as much or more than he was paying for an apartment of his own, while I get a nice big chunk of cash every month to put towards my mortgage. I've seen the argument in this thread that "Oh, but she gets to live in a house instead of an apartment", but I don't think that's justification for her paying the same. If I were taking in a friend in a roommate arrangement and she were giving up a place of her own and going to shared living arrangement, she would very reasonably expect to save money. I would not use the argument, "Oh, but you get to live in a house instead of an apartment so you should pay the same or more as you did for your apartment." And of course it's all the more important to treat a significant other fairly and think of the long-term financial consequences for her. You both deserve to benefit financially from this living arrangement. Unless you're planning on giving her part of the equity for the house, I'd charge her something comparable to what I'd charge a roommate.
If she gets to use your car which you pay for, of course that is an economic benefit for her that can be considered when you figure out how much she pays in living expenses.
Those of you saying she should pay "market rent" forget that she did not choose to pick this home with the bills. If you were choosing a place together, what would she want to pay? Be willing to pay? What if he lived in a house that was oodles more expensive than she could afford in fair market value? even though he clearly doesn't need the extra income? Is this more or less than her previous arrangement and is she ok with that?
Put it this way. You earn something like $5933 a month after taxes. Under your arrangement, you would be paying $1266 a month for your mortgage, leaving $4667. She earns about $3448 a month and would pay $633 in rent, leaving $2815 a month.
(obviously not exact, just based on tax calculator with income)
Plus, you must get a bunch of deductions with the interest, so the disparity would be more than that.
You might not completely blend finances, either now or in the future. If I owned a house that I could afford without another person, and my partner moved in, I wouldn't even let them pay their previous rent because I wouldn't want to make money (equity and tax deductions) off my partner. I'm also the kind of person who hates the "let's each put in 50% of our income" model of partnership without an understanding of how to address the huge disparity, ie keeping 50% of 100k is much more than keeping 50% of 50k. But everyone is different and maybe that makes you both exceedingly happy to maintain some other definition of equality.
Whatever choose, say that it'll be a 3 month trial in terms of finances ands promise to revisit it at that time. what happens if she finds this is too much, especially when combined with higher utilities? And even beyond the money itself, what happens if she starts to feel resentful of the arrangement? Plan for some of these contingencies.
posted by barnone at 9:03 PM on January 30, 2012
Just an observation that you seem to be very interested in doing what is right and fair and I applaud you for that. One of the things maybe neither of you have thought of is the compounded power differential this move creates. If things go wrong between you, she will be the one who has to move. If she feels that you are charging her money to live there but her right to be there is not based on what she is paying but on being your girlfriend, then she does not have a home, even if she pays half of the mortgage.
If she pays more to live than she is paying now, it is even more unfair because where she is now she has a right to be. In your house, she is there at your pleasure, no matter how you share expenses. If she is not aware of this now, she will become aware of it the first time you have a serious disagreement.
I think it falls to you to understand going into this that even with a larger living space and the use of your car, she is risking more than you are and should not have to be worse off financially than she is now as well as lose power over her living space. It also so often happens that a woman is expected to automatically do domestic duties that even if you are not asking, she might begin feeling the need to offer because of the power difference between you. It's not just about money. The power imbalance can ruin a relationship if you ignore it.
My best to you. If you two go into this communicating about all these things and being very concerned each about the other, you might have just started an awesome relationship. I hope so.
Came back to add another thought to my comment above. I disagree with the suggestion from some commenters that the amount of your mortgage should be a measure of how much your partner pays in rent.
Say you agree to split the mortgage 50/50. If your mortgage is $1,000 because you put down a huge down payment, she pays $500/month rent. But if your mortgage is $2,000 because you had less savings but a higher monthly cashflow, then she pays $1,000/month rent. Doesn't make sense.
Rent should be based on market rates (objective), with consideration up or down based on your snowflakey relationship details (subjective).
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