Bookmark this page
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
Is good to be King ! The rich, who most can afford life's perks, get the additional financial breaks us Po Folk can never have. Ergo, "the rich get rich and the poor get poorer" - the old song lyrics still hold true today. For example, a highly compensated executive has his home, car, country club dues, etc. paid for by the company. Zuck is just taking advantage of "welfare for the rich" - he'd be dumb (and poorer) if he didn't.
And again here it shows that the rich get all the breaks. I have $5.00 to my name, a Bank will NOT lend me money to buy a house, and if they do I'll get the highest Finance rate legally possible because my income is less than the average,
Zuck is doing the lender a favor as well.....extremely low risk of default, a rate better than letting cash sit in the vault overnight...i doubt he is doing it for the cash flow.....probably a good gesture to a friend that took a chance on him in the past
P.S. There are many Privileged Kids that can't get a 1.05 Mortgage Rate or a Mortgage at all. Are you mad at them too?
I don't hate the rich I just think its wrong that they get all the tax breaks, all the "perks" and then park their money in the Bahamas.
You and I pay our taxes and contribute meanwhile look at whats happening in the banking industry just today. HSBC busted for laundering money from terrorists and countries we are at odds with.
If your rich that's cool just pay your share don't lobby to pay less than everyone else.
Zuck, you should be ashamed of yourself. With all your billions you should either pay it out of your checking account or accept the rate that everybody else has to pay - that is if they are lucky enough to even get a loan.
stantis baratheorn
What a sorry looser you must be.
Bitter much, "Stantis"? How can you hate ALL of the rich? You must not be an American. We are a capitalist society - remember? This is the country that allows you to do great things with your creativity and be rewarded for it. Instead of spending your nights online raging at the machine, why don't you go pick up a talent that can allow you to actually accomplish something in your life?
By the way, it's Stannis Baratheon - if you're going to rip off a character to use as your nom de plume, you could at least do it some justice. Grew up in a household maing ~40k a year, I know make ~130k. That's what makes America great. But you gotta work for it...
As long as he doesn't invest it all on Facebook shares, the plan will probably work.
Polyana, good article and the above was very funny
are you kidding me? why are they even writing about this guy? he' s a proven a hole who doesn't give a rats ass about anyone, of course he got 1% and change he's filthy rich and will burn in hell like the rest of the rich