Context: common law union, living together for the past 8 years, purchase a house together ~1.5y ago(joint title and mortgage). I've an income 3 times higher than my partner(before taxes, that is), so their contribution to monthly expenses(mortgage, car, bills, grocery, dinner, etc) was always between 20-25% of the total.

Now we are splitting ways and sorting out the financials and I'm trying to get to a fair split. The house we purchase decreased value in this last 1.5y due to bad timing and I do not expect to go up to original price in less than 3y. Transferring the mortgage and the title to my name would be way too expensive and I trust her not to come for any profit(if any until I decide to sell) years down the road. Which leaves me with two ways to go about this,

  1. I pay their entire contribution in the last 1.5y, which entails principal, interest and tanking the depreciation. This would mean that it would be like they never bought a house, neither paid any "rent". It is like the past 1.5y didn't exist at all and the money is returned including all contributions.

  2. I sell the house now and split 50/50. Since there was a depreciation in the house and the realtor fees are crazy right in Canada, it means the equity is lower than the cost of selling, so we would need to pay to sell - not to mention that the mortgage payment is almost double what rent used to be.

We kinda agreed on the first option, but the more I think about this, the more I see I'd be tanking the market twice: when I pay their part entirely back(principal + interest contributions + bad decision) and when I sell ~1.5y from now trying to avoid bank penalties - I'm not playing to stay here, and the market is very unlikely to be where it was.

It just sucks that if I go for option 2 they would likely have to pay money from their pocket to cover the sell, and they don't have it to be honest - I'm also trying to put them in a good position to start over(the split is mutual decision).

Right now, I'm paying them 75% of the total equity we accumulated together, this math was actually proposed by me and just now that I see I'm paying way more than we actually built together - I'm disregarding the money I've in my account solely from my job.