Facebook founder's ultra low mortgage rate
Wed, 18 Jul 2012 6:32p.m.
By Tony Field
Even billionaires borrow money, and Facebook founder Mark Zuckerberg has a mortgage of US$5.9 million.
But he's paying a much lower interest rate than the banks would offer the typical American family.
It turns out our banks are also prepared to discount loans to the wealthy.
Despite being worth an estimated US$16 billion, Mr Zuckerberg has a US$5.95 million adjustable mortgage with an initial interest rate of 1.05 percent.
That's below the US inflation rate, meaning he can take the money he would have spent on the house and invest it elsewhere.
He is not considered a credit risk, so the rate is far below what most Americans could get.
Mr Zuckerberg’s rate could go up - but he'd have no trouble paying off the loan.
Here in New Zealand, the banks are also prepared to offer cheaper rates to their richest clients.
Mortgage broker Mike Pero knows it goes on.
“From my experience the banks will offer good customers between half and maybe 1 percent less, and that would depend on the relationship.”
Mr Pero says the rates on offer here are more likely to be 5or 6 percent - well above our inflation rate - but a deal still worth taking.
“You might as well carry the debt there and invest it in your business, and if you can get 10, 20, 30 percent why not use the bank's money?”
It seems wherever you are in the world, those who need the money least, find it easiest to borrow.
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