Half of pay will be spent on mortgage warn analysts

When interest rates rise mortgage payments will rocket. Mortgage payments could surge if interest rates return to their normal level. People buying a new home may be forced to spend over half of their take-home pay on their mortgage once interest rates rise, according to specialists. The current 0.5% interest rate will return to around 5% in the coming years, which means mortgage rates could rise to 8%, experts at Capital Economics have warned. For people buying a new house their mortgage repayments could rise by 17% to a massive 51% of their average take-home pay. This works out at about £12,000 a year for people on a gross salary of £31,500. For people who already have a mortgage the figure could reach 42%.