Zuckerberg, who founded the social network in 2004, took out the 30-year adjustable-rate mortgage worth $5.95m on his five bedroom house in Palo Alto, California.
Despite being able to pay for the home outright, the 28-year-old is able to borrow at a rate of just over 1% and invest his money elsewhere, receiving a higher total level of return.
“When you can borrow at a rate below inflation, you’re borrowing for free,” financial analyst Greg McBride commented to Bloomberg.
“This is the concept of using other people’s money and it preserves financial flexibility for the borrower.”
Zuckerberg took out the mortgage with First Republic Bank, who were willing to offer him a preferential rate due to his high net worth, said to be around $15.7bn.
“While almost all lending rates have reached historical lows this year, the borrowing costs available to high-net-worth individuals are even lower if the person is willing to bear the risk of monthly interest rate adjustments,” McBride added.
Zuckerberg’s monthly repayments are thought to be $19,275 per month.
