Almost half of Canadian households don’t feel financially prepared for further interest rate increases, according to a survey released Monday.

Forty per cent of respondents to an Ipsos poll, conducted on behalf of MNP, said they fear ending up in financial trouble if rates go up much higher, with one-in-three already feeling the impact of higher rates.

“It’s clear that people are nowhere near prepared for a higher rate environment,” MNP President Grant Bazian said in a release. “The good news is that there seems to be at least the acknowledgement now that rates are going to climb which might make people reassess their spending habits – especially using credit.”

Forty-two per cent of respondents said they don’t think they can cover basic expenses over the next year without going deeper into more debt.

The same number said they're within $200 of not being able to cover monthly expenses.

The survey also found 70 per cent of Canadians said they will take a more cautious approach to spending amid higher interest rates.  

Concern about rising rates is greater among lower-income Canadians, according to the survey, as opposed to homeowners who are a bit more optimistic they can absorb a rate increase of 1 percentage point.

Geographically, over half of Albertans say they’ll be more concerned about paying off debt if interest rates rise, which is more than those in British Columbia and Quebec, where less than half said they are worried. Ontarians are the least concerned (44 per cent) about their ability to pay down their debts.

The Bank of Canada raised interest rates for the first time in seven years in July, with another unexpected increase in September.

The probability for a third rate hike has been dialed back, with the implied probability of the central bank increasing its benchmark rate on Wednesday at just 16.6 per cent. Odds were close to 50 per cent a month ago.