A financial planner explains why splitting your partner’s $2,100 mortgage will leave you with nothing. And it’s okay
La Famiglia/Shutterstock Living together before marriage was once a cultural taboo, but cohabitation has grown in popularity and it’s reshaped relationships, families and finances. In 2024, approximately 20.4 million (1) Americans were living with their unmarried partner. And between 2020 and 2022, roughly 80% (2) of recent marriages were preceded by cohabitation. Must Read The…
Living together before marriage was once a cultural taboo, but cohabitation has grown in popularity and it’s reshaped relationships, families and finances.
In 2024, approximately 20.4 million (1) Americans were living with their unmarried partner. And between 2020 and 2022, roughly 80% (2) of recent marriages were preceded by cohabitation.
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The trend means more couples are entering into living situations where the traditional financial protection of marriage or co-ownership isn’t afforded — and this could raise possible financial questions couples must work through.
Let’s take the example of Emily and David, who have been in a relationship for four years. They’re looking to take the next step in their partnership and finally move in together. But Emily has already bought her own home and is locked into a mortgage.
Emily wants David to just move in and begin splitting her monthly mortgage payments, which are just over $2,100 a month. David, who is currently paying around $1,200 a month for rent, figures this arrangement could actually save him money since his split of the monthly mortgage payments would be lower than what he currently spends on housing.
But David is worried that he could be contributing to a home he has no say in. Is this a smart move for David? And is paying for someone else’s mortgage, even if it is your partner, too risky?
The landlord-tenant perspective
Legally speaking, Emily’s home is hers alone. In most states, David will have no right to the home unless his name is on the deed. This means he will be contributing to her mortgage payments — and her equity — without gaining anything.
If Emily eventually decides to sell the house down the road for more than what she’s paid for it, David will not profit off of the sale, even though he helped pay it off.
On the other hand, the arrangement means David isn’t taking on any risk. If the house needs a new roof, someone is injured on the property or the home’s value declines, David isn’t on the hook. Those costs and liabilities remain Emily’s responsibility alone.
In many ways, the arrangement is the same as any landlord-tenant relationship, David is just paying rent to a different kind of landlord.
That’s how Sarah Asebedo, a certified financial planner and professor at Texas Tech University, described the situation in an interview with Moneywise.
“…From his standpoint it’s rent right. I pay it here, I pay it there, it doesn’t matter if he truly sees it like that,” Asebedo said. “If you think you’re contributing to something that you are kind of psychologically owning, it’s a problem because you own nothing.”
If Emily and David were to break up after he had spent thousands of dollars contributing to her mortgage, he would have no legal rights to the home. But the same would be true under any landlord-tenante lease agreement, the only difference is the emotional aspects at play.
Asebedo says if David understands that he has no ownership interest in the home and views the payments simply as rent, then the arrangement isn’t necessarily risky. But both parties need to have a clear understanding about who owns the home, what David is paying for and what rights — or lack thereof — he has to the property.
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Getting on the same page
From a financial standpoint, David contributing to Emily’s mortgage may actually help save him money. But Asebedo said couples shouldn’t let finances alone drive the decision to move in together.
“You’ve got to step back and take a really hard look at the relationship question,” Asebedo said. “Is this the right move for us and our relationship, money aside?
If Emily and David are moving in together primarily to save money — with Emily lowering her monthly mortgage payments and David saving on rent — then it isn’t for the right reasons and it could cause issues.
“Don’t use money as an excuse to make a relationship move,” Asebedo said. “I know it’s hard to completely disentangle those, but do your best to sit down and have an open, honest conversation about where you are and what you’re ready for.”
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Bowling Green State University (1), (2)
This article originally appeared on Moneywise.com under the title: A financial planner explains why splitting your partner’s $2,100 mortgage will leave you with nothing. And it’s okay
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