My wife wants me to give her financially reckless sister a £400,000 loan

Richard’s wife wants him to help her sister out financially (Picture: Getty Images) Divorce can be brutal – not only is a relationship breaking down, a home, family and friendships are all subject to emotional demolition. At this turbuent time, many look to maintain normality by staying in the family home. But if it costs the earth, is it really the best plan? This week’s Money Problem comes from Richard, 49, an investment director from Surrey, whose wife is pressuring him to pay her sister’s mortgage following her divorce. He thinks it’s a terrible idea – is he right? He asked Metro consumer champion, Sarah Davidson, for her view. The question… My wife’s sister is divorcing and wants to keep the family home so her two children can stay near their school and friends. I feel sorry for her, genuinely, but she needs around £400,000 to buy her ex-husband out and cannot borrow enough herself. My wife has asked whether we can lend the money or go on the mortgage with her. Although he can afford it, he’s not sure it’s a good choice (Picture: Getty Images) We could afford it on paper. I earn well, we own a large home and we have savings, although we also have private-school fees, a sizeable mortgage and a lifestyle we have worked hard for. I do not want to give up our holidays or pension contributions because my sister-in-law bought a house she can no longer afford. Ask Metro Use AI to go deeper into the stories you care about – powered by Metro and trusted publications. My wife says I am behaving like a heartless banker rather than family. I think she is ignoring the risk. Her sister has always been terrible with money and if she missed payments, I worry we would be drawn into years of arguments or have our own ability to borrow affected. Am I wrong to refuse? The answer… Let me get this straight – your wife wants you to give her sister almost half a million pounds so she can stay in her house? I’m working on the basis that she has probably got the standard half of the family assets and income from the divorce, particularly given there are two children still of school age involved. So, this might sound silly of me, but if she needs £400,000 to buy out her husband then the house must be worth quite a massive whack more than that? What should Richard do regarding his wife's request to loan £400,000 to her sister? Agree to the loan to support the family.Check Decline the loan and suggest alternate solutions.Check Provide partial financial support instead.Check Encourage seeking professional financial advice.Check Sign up to Metro's The Slice newsletter for your guide to what's on in London, with trusted reviews, offers and giveaways. Richard, I do not think you are heartless. Your wife is asking you to make a significant financial decision at the height of a highly emotional and messy time. While your sister-in-law’s wish to keep her children close to familiar routines is entirely understandable, the practical reality cannot and should not be ignored. They live in an expensive home bought by two parents, with two salaries paying the mortgage, council tax and bills.The maths just isn’t going to work when you take one of those salaries out of the equation. The ‘solution’ your wife and her sister have come up with is for you to provide the missing £400,000 – presumably to bring the size of the mortgage down to a level she can afford to repay by herself. This might seem neat but it’s definitely not simple. Let’s break it down. One, the fact you can afford it on paper does not make it a comfortable commitment. Your school fees, mortgage and pension provision are valid responsibilities too. Even if Richard does lend the money, it all needs to be done officially (Picture: Getty Images/iStockphoto) Two, if you ‘go on the mortgage with her’ you are most likely agreeing to become a guarantor – meaning, if she fails to make her repayments, you’re on the hook for them. Going on the mortgage could restrict how much you can borrow in future, tie you to your sister-in-law’s payment record and create a question about whether you have any legal interest in the property. Three, the lender does not have to release an existing borrower just because a separating couple have agreed it between themselves. Her plan needs to be tested properly rather than patched up by a well-off relative. Four, even if you were to agree to loan her the money separately, it’s unlikely to help your sister-in-law with the mortgage situation. Financial Conduct Authority rules require lenders to assess affordability, looking at income, committed spending, essential household costs and likely future interest-rate rises. Even interest-free, £400,000 repaid over 15 years is over £2,200 a month – on top of her existing mortgage, bills and childcare. If she cannot show that those repayments are affordable in a detailed budget, you have your answer. More Metro Money Problems Your sister-in-law needs proper legal advice about the divorce settlement before anyone transfers money. Her family solicitor and a regulated mortgage adviser should explore whether she can remortgage alone, whether a nearby lower-cost home is realistic or whether a deferred sale arrangement is suitable. I know a move feels harsh when children are involved. Yet years of anxiety over a home that swallows every spare pound can be worse than a carefully managed move. You refusing to become a joint borrower or guarantor is a reasonable boundary. Tell your wife you want to help her sister find a stable solution but you cannot make your own household the insurer of a mortgage she cannot sustain. Deals of the Day I tried L'Oréal Paris's new PDRN serum and my skin looked glossier after one use This new Cricut gadget turns your favourite photos into stickers in minutes From kitchen hatches to burgundy walls – the biggest home trends for 2027 Oodie’s cosy blanket sale has arrived just in time for Christmas shopping Save over £700 on Simba's top-rated mattresses in this limited-time sale It might seem like compassion today, but it will only be a matter of time before it combusts and makes life a lot worse for everyone. 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