In a new survey, Manulife Bank of Canada found that over 16% of Canadians will not be able to service existing debts if their current mortgage payments increase in any way (even if their main wage earners do not get laid off).

The study further revealed that more than 30% will find it difficult to pay their bills within three months if the household’s breadwinner loses their job, BNN reported.

The results emphasized that more and more Canadians are finding themselves ill-equipped to handle emergencies—not surprising in an era that has seen costs grow steadily amid stagnant incomes.

“The survey results [are] more reflective of monthly mortgage costs — which are a function of debt and interest rates,” Manulife Canada Chief Investment Strategist Philip Petursson wrote in the data release. “Perhaps the emphasis is misplaced on interest rates, given the fact that interest rates are at decade lows, as opposed to the real driver of higher mortgage costs, which is housing prices.”

Especially at risk are millennial consumers, with 83% of the survey respondents in the 20-34 age group carrying mortgage debt.

Complicating matters is that a poisonous brew of a runaway US dollar, a possibility of a US Federal Reserve rate hike, and continued uncertainty amid Donald Trump’s ascension as US president is making itself felt in bond and mortgage markets the world over.

Recently, The Globe and Mail markets observer Don Pittis warned that while the housing sector is slower to react to such an increase than the bond markets, both will certainly feel the impact of a Fed hike.

“Slowing house prices and falling bond prices have the same trigger,” Pittis wrote. “[Everything] else being equal, rising interest rates would eventually have the same effect on houses that it has already had on bonds. Higher rates make existing assets fall in value.”

Canadians Are Incapable of Servicing Higher Mortgage Costs by Ephraim Vecina | Canadian Real Estate Wealth