The 23-year-old Wales international has spent this season on loan with the Championship outfit and has scored 11 goals to date, having previously enjoyed temporary stints with the likes of Rotherham, Blackburn and Cardiff.
It has arguably been Lawrence's best loan spell of his career at Portman Road and McCarthy has not hidden from the fact he would love to keep him on board for the long term.
However, the 58-year-old Yorkshireman fully expects Lawrence to try and make the step up to the top flight from next season.
"I think Tom will have his heart set on the Premier League and I think he'll get that," said McCarthy.
"If Leicester are going to sell him, there'd be a lot of takers."
He added: "Tom has been brilliant and we've all loved him, everybody's really appreciated what he's done, but I think he has his heart set on Premier League football and why wouldn't he?"