Nearly three quarters of Canadian homeowners say they would have difficulty paying their mortgage if their payments were to increase by more than 10%, says a new survey by Manulife Bank.

Thirty-eight per cent of those polled say their mortgage bills could rise between 1% to 5% before they would have financial difficulty; 20% say they could sustain an increase in payments between six to 10% before having trouble; and 14% say any hike would be a problem.

Twenty-two per cent said they could handle a payment increase of between 11% to 30%, while the remaining 7% cent didn’t know or were unsure.

“What these people don’t realize is that we’re at record low interest rates today,” said Rick Lunny, president and CEO of Manulife Bank (TSX:MFC), adding that a 10% increase in mortgage payments could be the result of as little as a 1%.

“When you put it into that context, they’re not really prepared for what is inevitable. Sooner or later, interest rates are going to rise.”

The survey found that 45% of millennial homeowners — those aged between 20 to 35 — would have the most difficulty making their mortgage payment within three months or less if the primary income-earner in their families were to suddenly become unemployed.

Millennials were also the group that on average had the highest amount of outstanding mortgage debt, at $223,000, while gen X-ers (those aged 36 to 52) had an average of $202,000 owing. Baby boomers (ages 53 to 70) had $180,000.

Lunny said many millennials are unprepared to deal with a financial emergency due to a lack of financial literacy and soaring amounts of debt. That group has seen their mortgage debt rise more than any other generation, according to the survey.

The survey was conducted online in English and French from Feb. 1 to 14. It polled 2,098 homeowners between the ages of 20 to 69 with household incomes of $50,000 or higher.

The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.