A new study by research and insights agency Opinium reveals that 71% advisers are concerned that clients don’t fully understand the risks associated with interest-only mortgages.

In total, 44% of brokers say they have seen an increase in enquiries about interest-only mortgages over the past year.

Additionally, similar research from Opinium found that one in seven (15%) consumers would consider taking out an interest-only mortgage in the future.

The top three reasons clients gave brokers for expressing an interest in interest-only mortgages came down to reducing payments.

The top answer was trying to lower monthly costs (57%), struggling with current mortgage payments (41%), followed by clients trying to keep month to month housing costs low (41%).

Overall, 31% said it would be for short-term financial flexibility, while one in five (21%) say clients plan to downsize.

Only 17% said it was to explore investment opportunities and another 17% said it was down to a desire to get onto the housing ladder.

However, despite this rise in demand, seven in ten mortgage advisers say they are concerned clients don’t fully understand the risks involved.

A further 41% are concerned about clients struggling if their repayment plan underperforms, while 19% are worried about clients paying off more interest and potentially missing out on savings.

Opinium head of financial services research Alexa Nightingale says: “In today’s challenging economic times, it is perhaps not surprising that interest-only mortgages are more on the radar of homeowners, particularly as they offer lower initial monthly payments and cash flow flexibility.

“Despite the appeal, it is important to note that not everyone will be eligible for an interest-only mortgage and can be tricky to qualify for.

“On top of this, there is a concern among mortgage advisers that clients do not fully understand the risks involved in taking out an interest-only mortgage, but rather they seem to be interested in the short term benefits this type of mortgage deal can offer, as opposed to considering the potential longer-term risks.

“As such, it is important for advisers to ensure they are covering all bases in conversations with clients so that they can make well informed decisions.”

The research was carried out using Opinium’s IFA omnibus, the UK’s only dedicated research community of IFAs.