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Your family home: case study 3

Harry and Sharon: an example of a medium/long marriage with a low mortgage

Harry and Sharon have been married for 20 years. Their children are 22, 20 and 17.

Their house is worth £300,000 and the mortgage is £50,000. The equity therefore is £250,000.

Harry has a pension worth £100,000.

They have decided that they will sell, and agree that their housing needs would be £250,000 each in the future. 

They have agreed that, instead of having a pension, Sharon will keep more of the equity. She will therefore take her half of the overall capital (of £250,000 + pension of £100,000 = £350,000. Divided by 2 = £175,000), but have her 175,000 from the sale proceeds. She therefore has £175,000 as a deposit for her new home, with £75,000 to borrow by way of a mortgage.

Harry will keep his pension and take £75,000 from the proceeds of sale. He will then borrow £175,000 by way of mortgage to buy his new home.