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Most mortgage borrowers would be struggling to make ends meet if their monthly payments went up by 10 per cent, suggests a new survey from Manulife Bank of Canada.

Millennials, commonly referred to individuals between 18 and 32 years old, are most likely to have difficulty making a mortgage payment if an emergency occurs or the primary earner in the household becomes unemployed.

“The truth about debt in Canada is that many homeowners are not prepared to adjust to rising interest rates, unforeseen expenses or interruption in their income,” says Rick Lunny, Manulife Bank of Canada’s president and CEO, in a statement.

Manulife surveyed nearly 3,000 Canadian homeowners in February 2017 to find out about their debt over the past year.

Despite 78 per cent of Canadians placing debt freedom at the top of their goals, 52 per cent of homeowners don’t have financial flexibility to cope with unexpected costs and 70 per cent wouldn’t be able to manage a 10-per cent hike in mortgage payments.

Last year, average mortgage debt soared 11 per cent to $201,000 in Canada, according to Manulife. Millennials owe the most on their mortgage with an average debt of $223,000, followed by Gen Xers with $202,000 and Baby Boomers with $180,000.

Over the last year, nearly one quarter of mortgage holders were at least once short-handed when paying their bills, with 32 per cent of Millennial borrowers strapped for cash one or more times..

If the breadwinner of a household were to lose their job, 45 per cent of Millennials would struggle to make a mortgage payment within three months, along with 40 and 32 per cent of Gen Xers and Baby Boomers, respectively.

In the event of a decline in income or unforeseen expenses, one in five Canadians have no emergency savings to depend on, according to the survey. In addition, half of mortgage holders have $5,000 or less in their emergency fund.

Even though Millennials appear to be most at risk with debt, Baby Boomers are not in the clear. About 41 per cent of boomers stated that home equity accounted for more than 60 per cent of their household wealth.

Despite 77 per cent of boomers wanting to stay at their current address during their golden years, Manulife says boomers may need to rely on selling their home to fund retirement.

“Many boomers approaching retirement share the same lack of financial flexibility as Millennials,” says Lunny. “They want to remain in their current homes, but their home makes up a big part of their net worth,” Lunny adds.

While Millennials are most at risk of defaulting if faced with financial adversity, they had the most help from family with their downpayments. When purchasing a home, 45 cent of Millennials relied on the bank of mom and dad, whereas 37 per cent of Gen Xers and 31 percent of boomers received help.

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