Tracker Mortgages and Marriage

[assesorland]

I am due to marry shortly. We are currently sharing a house together, although the mortgage for the house is in my partner’s name. We are lucky enough that the mortgage is a Tracker which gives us an excellent rate (currently 2.3%). My partner invested €50k in the house before we met. After the marriage I want to invest €50k too, so that will reduce the term of the mortgage for us both going forward.
When we enquired with the bank about adding my name to the mortgage it is not as simple as we thought. Basically they would have to do up a new mortgage in both our names and under the new mortgage we would loose the tracker rate! We are afraid that will cancel out the positive effects of my €50k as our monthly payments would rise considerably under a fixed or variable rate.
We were advised to stick to the Tracker (keeping it in the current name) and then to get our solicitor to draw up a legal document showing my investment of €50k and that the property is owned equally by the two of us. We have no problem going this way about it but just wondered if anyone else had this same issue with a Tracker Mortgage and the legal part worked out ok by going through a solicitor?
Obviously, we would take out joint life assurance to cover both of us.

 

[Artois]

I'd stick with plan A and get married then put the 50k towards the mortgage. When the banking system is functioning again and prepared to match your current tracker then look about tranferring the property & mortgage into your joint names.

Re: both taking out life assurance - You cannot take out life joint life assurance on the property until you have an insureable interest in the property.

 

[Brendan Burgess]

Hi Assessor

Check out this post. As you can earn deposit interest in excess of 2.3%, there is no point in paying a lump sum off the mortgage.

Given that you would end up paying at least 1% more on the entire mortgage, it makes even less sense.

Doing a separate agreement is the right thing to do.

But the arithmetic is a bit more complicated than is being suggested.

It is irrelevant that your fiancee put in €50k. The only think relevant is the value of the equity now.

Say that the house is worth €400k and her mortgage is €320k. Her equity is €80k. You should contribute €80k to this deal and not €50k to own half the house. Likewise, if the house is worth €400k, and the mortgage is €400k, then you should not contribute anything.

Brendan