According to The San Franciso Chronicle, the billionaire and creator of Facebook has a mortgage rate of 1.05 percent. The article claims that Zuckerberg “refinanced a $5.95 million mortgage on his Palo Alto home with a 30-year adjustable-rate loan starting at 1.05 percent.”
Why is the rate so low?
In the article, Greg McBride, senior financial analyst with Bankrate Inc. said that it has to do with risk tolerance. A mortgage rate can be lower if a person is willing to risk monthly interest rate adjustments.
He said, “When you can borrow at a rate below inflation, you’re borrowing for free. This is the concept of using other people’s money and it preserves financial flexibility for the borrower.”
But, a better question might be: why does Mark Zuckerberg need a mortgage in the first place?
He doesn’t. But, it’s a smart business move. After all, Zuckerberg is borrowing for free. So, why would he tie up his own money when he can use someone else’s money for more profitable things?