HOMEOWNERS who would rather buy a case of first-class Bordeaux than pay off their mortgage can now indulge guilt-free, after the launch of a fine wine investment plan.

The scheme, launched yesterday by Premier Cru Investments, allows interest-only mortgage borrowers to buy cases of wine as an investment that will eventually pay off their capital debt.

However, the mortgage industry has warned homeowners to steer clear of the scheme, dismissing it as a dangerous gimmick. Experts are worried that volatility in the fine wine market could put investors at risk of losing thousands of pounds, similar to the losses suffered by endowment scandal victims in the mid 1980s.

Borrowers who invest directly with Premier Cru instead of through a regulated independent financial adviser would also have no right to compensation through the Financial Ombudsman if things go wrong, because the company is not regulated by the FSA. Sue Anderson, of the Council of Mortgage Lenders, said: “Borrowers should steer clear. If anything goes wrong, there is no statutory redress.”

Nick Gardner, of Chase de Vere Mortgage Management, the mortgage broker, said: “You could drink yourself into negative equity. We would never recommend borrowers rely solely on one investment, including wine, to pay off their mortgage.”

Interest-only borrowers account for nearly 20 per cent of the UK mortgage market, but there are fears that they could be sitting on a debt “timebomb”. The FSA has launched an investigation into interest-only lending.

Premier Cru believes the Home Cellars plan is particularly suitable for interest-only borrowers because fine wine generally outperforms standard equities and the investment is tax-free and flexible.

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