Savvy homeowners know that a penny here and a penny there adds up. That’s apparently the case for Facebook founder Mark Zuckerberg, who — despite a reported net worth in excess of $14 billion — just refinanced the mortgage on his Palo Alto, Calif., home.
The rate he got, according to Bloomberg’s John Gittelsohn and Dakin Campbell, was 1.05% on an adjustable 30-year loan.
The duo notes that’s somewhat better than market, as average rates on 30-year mortgages that reset after one year are running at 2.69%.
But you don’t get to be a preferred customer without having good financial habits. And since the new rates are a drop from his previous mortgage’s 1.75%, the 28-year-old billionaire’s savings on the $5.95 million loan are approximately $1,981 a month.
Not bad, even for a guy who has at least $14 billion — roughly the GDP of Iceland. Put that in $100 bills, and it would weigh 153 tons.
But hey, money-savvy people often care about the little things, right? And Zuckerberg is very down to earth. The house — which was purchased in the name of an LLC for $7 million last March — is a relatively unpretentious prairie-style five-bedroom set on a fifth of an acre with a modest saltwater pool.
The well-groomed backyard was the setting for his wedding to longtime girlfriend Priscilla Chan just two months ago.
Priscilla, you may have married a keeper. Even if rates rise, the loan resets are capped at 9.95%, making the maximum payment for the home $51,995 a month.
Financial observers speculate that the only reason Zuckerberg took a mortgage at all is that if the hoodie-sporting mogul can borrow at a mere 1.05%, he can invest the money in assets with a higher return.
Assets, that is, that probably aren’t Facebook: the stock was down 22% from its May IPO price as of midday trading today.
Well, we at Moneyland are here to help. May we suggest the best use of extra real estate cash is a minor kitchen update or a new set of energy-efficient windows?