Unequal deposits — how to split ownership fairly
6 min read
When one partner puts in more equity, the fairest solution is usually a waterfall settlement: each partner gets their documented contribution back first, and the remaining growth is split by agreed shares.
In short
- Equal ownership and equal contribution are not the same thing.
- A waterfall settlement returns contributions first, then splits the surplus.
- Growth in value should normally follow ownership shares, not deposits.
- Whatever model you choose, log every contribution as it happens.
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The problem with 50/50
Suppose one partner brings 100,000 in equity and the other brings nothing. You register 50/50. Five years later the home has grown by 200,000 and you separate. A straight 50/50 split hands half of the original 100,000 to the partner who contributed none of it.
That is not always wrong — some couples genuinely intend to pool everything — but it should be a conscious decision, not an accident of paperwork.
The waterfall model
A waterfall settlement pays out in stages when the home is sold or bought out:
- 1. Repay the outstanding mortgage and sale costs.
- 2. Return each partner's documented equity contributions.
- 3. Split whatever remains according to the agreed ownership shares.
What counts as a contribution?
Be explicit. Most couples count the deposit, extraordinary mortgage repayments, and value-adding renovations. Ordinary living costs — food, utilities, insurance — are usually treated as consumption and not credited.
Mortgage instalments are the grey zone: the interest portion is a cost of living, while the principal repayment builds equity. Decide which treatment you want and apply it consistently.
Keeping the record straight
The model only works if the numbers exist. A settlement based on memory five years later is a negotiation, not a calculation.
cohab logs each contribution with an amount, date and owner, and applies your chosen waterfall automatically — so the settlement figure is available at any time, not just at the end.
Frequently asked questions
Should the deposit be adjusted for inflation?
Some agreements return the nominal amount, others index it. Indexing is fairer over long periods but adds complexity — pick one and write it into the agreement.
What if one partner pays more of the mortgage each month?
Either credit the extra as a contribution in the waterfall, or treat it as compensation for a lower income and note that explicitly. Both are legitimate; silence is not.
A waterfall settlement is a contractual arrangement. It is enforceable in most jurisdictions, but formal requirements for property agreements vary.
This guide is general information, not legal advice. Rules differ between countries — consult a local professional for your situation.
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