Buying a house 50/50
This question is really a variation of rent vs buy.  Try looking at it this way - If you bought it 50/50 and rented it out, what would you both get? Now, moved in, you are effectively collecting that rent, but half is your own money, half is from the partner.  Is the half you are getting the from the partner equal to 1/4 of the mortgage. This sounds convoluted, but once you spell all the numbers out, it would be clear.  Without the deal as you present it, you'd be paying the partner to 'live in his half.' I don't like it using percentages makes no sense.  Find out what market value is for rent and pay 1/2 of that to your partner, adjust annually.   You partner should be protected from inflation if he is going to invest in real estate.
"[Netflix is targeting 50% in-house content ""within the next few years.""](http://variety.com/2016/digital/news/netflix-50-percent-content-original-programming-cfo-1201865902/)  It says right now it is about 1/3 of the way there which - to me - works out to about 16.5%.  So maybe ""rarely"" wasn't the right word, but a large majority of the content it streams is not in-house." Firstly, playing the lottery is not investing it is gambling. The odds in gambling are always against you and with the house.  Secondly, no one would ever give you a payout of 3 to 1 when the odds are 50:50, unless they were looking to give away money. Even when you place your chips on either red or black on a roulette table your payout if you are correct is 100% (double your money), however the odds of winning are less than 50%, there are 18 reds, 18 blacks and 2 greens (0 and 00). Even if you place your chips on one single number, your payout will be 35:1 but your odds of winning are 1:38. The odds are always with the house. If you want to play the lotto, use some money you don't need and expect to lose, have some fun and enjoy yourself if you get any small winnings. Gambling should be looked at as a source of entertainment not a source of investing. If you take gambling more serious than this then you might have a problem. "No. Suppose you have 100 Canadian dollars and the exchange rate is 2 CAD = 1 USD.  You use your 100 CAD to purchase 50 USD (in your bank account that is in USD).  Some time later the Canadian dollar grows stronger, so that now 1 CAD = 1 USD.  If you now withdraw your 50 USD and get Canadian dollars, you will receive 50 CAD.  You have lost half your money. If you want to make money on currency exchange rates (which is a risky plan), you should buy the currency that is cheap (i.e., ""weak"").  If, say, oil is very cheap, you don't make money by selling oil; you buy it and sell it later when the price goes up.  Likewise, if the Canadian dollar isn't worth much and the US dollar is, you should buy Canadian dollars, not US dollars, hoping to sell them later when the exchange rate is more favorable.  See also this similar question." Over a period of time greater than 10 years (keep in mind, 2000-2009 ten year period fails, so I am talking longer) the market, as measured by the S&P 500, was positive. Long term, averaging more than 10%/yr.  At a 1 year horizon, the success is 67 or so percent. It's mostly for this reason that those asking about investing are told that if they need money in a year or two, to buy a house for instance, they are told to stay out of the market.  As the time approaches one day or less, the success rate drops to 50/50. The next trade being higher or lower is a random event.  Say you have a $5 commission. A $10,000 trade buy/sell is $10 for the day. 250 trading days costs you $2500 if you get in and out once per day. You need to be ahead 25% for the year to break even.  You can spin the numbers any way you wish, but in the end, time (long time spans) is on your side. "Personally I would advise only buying what you can afford without borrowing money, even if it means living in a tent. Financially, that is the best move. If you are determined to borrow money to buy a house, the person with income should buy it as sole owner. Split ownership will create a nightmare if any problems develop in the relationship. Split ownership has the advantage that it doubles the tax-free appreciation deduction from $250,000 to $500,000, but in your case my sense is that that is not a sufficient reason to risk dual ownership. Do not charge your ""partner"" rent. That is crazy." While I agree with the existing bulk of comments and answers that you can't tell the lender the $7k is a gift, I do think you might have luck finding a mortgage broker who can help you get a loan as a group.  (You might consider as an LLC or other form of corporation if no one will take you otherwise.)  That is, each of you will be an owner of the house and appear on the mortgage.  IIRC, as long as the downpayment only comes from the collective group, and the income-to-debt ratio of the group as a whole is acceptable, and the strongest credit rating of the group is good, you should be able to find a loan.  (You may need a formal ownership agreement to get this accepted by the lender.)  That said, I don't know if your income will trump your brother's situation (presumably high debt ratio or lower than 100% multiplier on his income dues to its source), but it will certainly help. As to how to structure the deal for fairness, I think whatever the two of you agree to and put down in writing is fine.  If you each think you're helping the other, than a 50/50 split on profits at the sale of the property seems reasonable to me.   I'd recommend that you actually include in your write up a defined maximum period for ownership (e.g. 5yr, or 10yr, etc,) and explain how things will be resolved if one side doesn't want to sell at that point but the other side does. Just remember that whatever percentages you agree to as ownership won't effect the lender's view of payment requirements.  The lender will consider each member of the group fully and independently responsible for the loan.  That is, if something happens to your brother, or he just flakes out on you, you will be on the hook for 100% of the loan.  And vice-versa.  Your write up ought to document what happens if one of you flakes out on paying agreed upon amounts, but still expects there ownership share at the time of sale. That said, if you're trying to be mathematically fair about apportioning ownership, you could do something like the below to try and factor in the various issues into the money flow: The above has the benefit that you can start with a different ownership split (34/66, 25/75, etc.) if one of you wants to own more of the property. The calculations you suggest have some issues, but I think they are not necessary to answer the question: It sounds like you are buying the house either way. So the question really is simply whether to pay toward your house first or your loan first.  In that case, the answer is simple: pay whichever has the highest interest rate first.  Make the minimum payment on the other until the first is paid off.  Remember this and make it your mantra for the rest of your life.  If you have any debts (such as credit cards) that charge a rate higher than the two options you have presented, do them first. Now, be careful as you compute the interest rates.  Most likely you can deduct interest on your mortgage, so its effective interest rate is lower [it is (1-T)*R instead of R, where T is your marginal tax rate]. For a while, the cost of mortgage insurance will make your effective mortgage rate artificially high, but it sounds like you intend to get to that 20% hurdle pretty fast, so my guess is that this is not a big factor. Congratulations on your bonus and good luck with your new home. "Condensed to the essence: if you can reliably get more income from investing the cost of the house than the mortgage is costing you, this is the safest leveraged investment you'll ever make. There's some risk, of course, but there is risk in any financial decision. Taking the mortgage also leaves you with far greater flexibility than if you become ""house- rich but cash-poor"". (Note that you probably shouldn't be buying at all if you may need geographic flexibility in the next five years or so; that's another part of the liquidity issue.) Also, it doesn't have to be either/or. I borrowed half and paid the rest in cash, though I could have taken either extreme, because that was the balance of certainty vs.risk that I was comfortable with. I also took a shorter mortgage than I might have, again trading off risk and return; I decided I would rather have the house paid off at about the same time that I retire."