Financing unequal equity ratios of unmarried partners

Hello everyone,

to begin with: I am fully aware that my request will probably cause some head shaking here, but as a logical thinker, I am trying to at least somewhat secure the uncertainties of the future. My partner (34) and I (35) want to push forward with building a house, with current costs estimated at €300,000 to €350,000. Now, although we have been together for 16 years, we are still unmarried and have separate accounts. I currently have about €130,000 in equity (including Riester), my partner about €30,000. The goal is for each of us to bear half of the construction costs. But how can this be done as fairly as possible, also to ensure that neither can take advantage of the other in case the relationship should break down? If we use the €300,000 as an example for the costs and I put in all my equity, I would only need €20,000 more, while my partner would need €120,000, so that I would only pay one seventh of the joint rate. Then we - or in case of separation, hopefully never happening, I - would have the problem that the bank would surely come after both of us, since legally everyone would have to pay half of the rate. Because of this, I am almost inclined to contribute only the same equity as my partner, to keep everything cleanly split half and half, even if it ends up being a bit more expensive in the end. When it comes to financing through the bank in such a case, does only the equity that is invested in the building matter for the offered interest rate, or also the actually available equity? Or does one even have to invest a certain amount of the available equity?

Best regards

You should discuss your questions, together with your partner, regarding financing with a bank you trust and regarding distribution in case of separation with a notary. Your problem could certainly be solved in the “Innenverhältnis“ with a contract. At the bank, you could then appear “together“. Your case is not uncommon, it only requires additional security.

We had the same problem. Additionally, my partner was self-employed. In the end, I built it "alone." The financing is set up so that I can pay for it alone. We have since gotten married and it was also clear to us that only with a marriage contract, since I don't want anything from his family home and vice versa. And for his personal contribution, he now lives rent-free. Only people who don't talk openly with each other find that weird. But it would also be possible with a notary to agree on who pays how much, and with the bank it would have been completely normal to have it in both our names.

Since my husband already owned the property, we included it in the cost of the house and are registered in the land register with the corresponding shares of the total value. So my husband owns a little more of our house, corresponding to the equity invested at the time. This is not a big notarial act and was important to us back then. Oh yes, we also have a [Ehevertrag]

Actually, it's relatively simple. The house/property belongs to the parties listed in the land register. If, for example, you want to pay 70% of the whole cake, you can also become a 70% owner of the house in the land register. The land register counts; everything else (extra contracts, etc.) is more than vague and could be torn apart in court. If person a is listed in the land register but has never paid a cent because person b paid all the installments, the house solely belongs to person a.

If you want to do half and half, then of course each of you can pump in your full equity and she pays higher monthly installments afterward. The bank doesn’t care where the money comes from.

We are currently in a similar situation, I am bringing in 60,000-70,000 equity, she even owes me (one used car). The monthly installments are split 50-50. I actually wanted a 60-40 split in the land register (value of the whole ~330,000), but it was messed up during the land purchase. Now we are both listed 50-50, or rather will be listed. I will ask my bank advisor about it again...
In the end, it’s about a lot of money, so you should give it some thought.

actually it's relatively simple. The house/land belongs to those listed in the land register. If, for example, you want to pay 70% of the entire cake, you can also become 70% owner of the house in the land register. The land register counts, everything else (extra contracts, etc.) is more than vague and could be torn apart in court. If person A is listed in the land register but has never paid a cent because person B paid all the installments, the house belongs entirely to person A.

Surprisingly precise legal assessment. I am quite impressed. It has succeeded in packing a lot of nonsense into very few lines, even if it (partly) points in the right direction. It is true that the landowner (as a rule) is also the owner of the house built on it.

I am quite aware that my inquiry will probably cause some head shaking among some here, but as a logical person I try to at least somewhat hedge the uncertainties of the future.

That will certainly cause very little head shaking among very few people. Thinking about this here and making contracts at a time when you (still) get along is absolutely fine. Of course, no one likes to talk about separation and the settlement afterwards, but it should still be taken care of.

There are several ways to regulate this property issue. The notary (who in most areas of Germany is also a lawyer) should ask about a contractual / real security. It is certainly not necessary that you only bring in the same share of equity and the rest (practically interest-free) just sits around somewhere.