Homeowners can now use fine wine to repay their mortgage following the launch of a new investment product.Premier Cru Fine Wine Investment has launched a new product which invests in fine wines, dubbed Home Cellars, which people can use as an investment vehiclealongside an interest only mortgage.The group said growth in fine wine generally exceeded other investments, addingthat there was a long history of stability in the fine wine market.
It said £10,000 invested in fine wine in January 1990 would have been worth £89,760 in January this year, while the same sum invested in the FTSE All Share Index would be worth only £39,145.
The investment product is managed by experts, so people do not need to have a knowledge of fine wine themselves, and the bottles are all held under bond in UK warehouses, so homeowners don't have to worry about storing them correctly or being tempted to drink their investment.
Investing in wine is tax free, and people can adjust their monthly payments to suit their finances. There is a one-off charge of £8.50 per case of wine bought, plus an annual management fee of 1.5%.Stacey-Lea Golding, investments director at Premier Cru Fine Wine Investment, said: "Mortgage repayments can prove to be a struggle and we are keen to provide an alternative solution to traditional, rigid repayment schemes.
We believe that this willsave mortgage holders money in the long-term, and provides a valuable new addition to the mortgage market."
But Justin Modray, of Best Invest, said: "This is high risk. The biggest issue is that it is not authorised by the Financial Services Authority so there is very little protection if things go wrong. The other issue is that if you are paying off your mortgage you want to move towards safer investments as you get closer to paying it off."
He said this was relatively easy to do with an ISA but was likely to be harder with wine.
He added that the figures quoted were for investing in fine wine generally and did not reflect investment returns generated by the group, so people who were interested in taking out the product would need to check Premier Cru Fine Wine Investment's track record.
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