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.
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