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Zuck refis at 1.05 percent

By Polyana da Costa · Bankrate.com
Monday, July 16, 2012
Posted: 5 pm ET

Facebook founder Mark Zuckerberg just got a phenomenal refinance deal on his Palo Alto, Calif., home.

The billionaire refinanced his $5.95 million mortgage with a 1.05 percent rate, according to a story by Bloomberg's John Gittelsohn and Dakin Campbell.

He got an adjustable-rate loan, which normally has lower rates than fixed-rate mortgages. But this is a superlow rate.

According to Bankrate's weekly survey, the average rate on the 1-year ARM was 3.04 percent last week.

Why did Zuckerberg get such a good deal? Let's just say banks "like" having a customer with a $14 billion net worth. It's not uncommon for banks to provide lower-than-market rates for their high-net-worth clients.

In reality, Zuckerberg doesn't even need a mortgage. But think about it. When you borrow at such a low rate, it's almost like getting free money. He will likely invest these millions elsewhere, hoping the return is higher than 1 percent. As long as he doesn't invest it all on Facebook shares, the plan will probably work.

Zuckerberg paid $7 million for his five-bedroom, 9,000-square-foot home in March of last year. This is the same home where Zuckerberg recently tied the knot with his longtime girlfriend, Priscilla Chan, a day after Facebook went public.

The refinance saves Zuckerberg about $2,000 per month, reducing his monthly mortgage payment to about $19,000. This is pocket change for the 28-year-old billionaire, but as a savvy investor, why pass on the savings?

What about you, how much money would you save if you refinanced your mortgage? Bankrate's mortgage calculator can help you figure that out.

Follow me on Twitter @Polyanad

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25 Comments
Cristina Hipolito
July 23, 2012 at 9:52 am

Lucky Guy!! He deserve it! Hope he remain to be a low profiled guy as he is.

Glenn
July 22, 2012 at 1:42 am

I'm sure he could "save" even more by not having a mortgage at all, which is certainly within his means. There's got to be a legal or tax reason aside from an extreme mortgage rate that he refinanced. For instance, just the interest on $11 million in a savings account @ 2.25% would make his mortgage payments for him, and I'm sure he has tax accountants that are far more creative than I can even imagine. A guy with a $14b net worth isn't worried about a mortgage that size unless there's something in it for him, such as publicity.