Facebook founder and CEO Mark Zuckerberg speaks in Palo Alto, Calif.
There are certain perks of being a billionaire: fancy cars, expensive clothes, and really cheap mortgage rates.
At least for Facebook founder Mark Zuckerberg, who recently refinanced the $5.95 million mortgage on his Palo Alto, Calif. home at an unfathomably low 1.05 percent interest rate, according to Bloomberg.
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Translation? Zuckerberg is basically borrowing that money for free, experts say, because it's below the rate of inflation.
Interest rates have been marching down for some time now, hitting record lows nearly every week. Last week borrowing costs for 30-year fixed mortgages sank to 3.56 percent, according to Freddie Mac's Primary Mortgage Market Survey.
But those willing to take on a little risk can get even better rates like Zuckerberg, who refinanced into a 30-year adjustable-rate mortgage. That type of loan starts with an initial rate of 1.05 percent—the minimum rate for the loan—and adjusts each month according to the London Interbank Offered Rate plus an additional fee.
But with rates unlikely to go up anytime soon, Zuckerberg and others with adjustable-rate mortgages don't really have to worry about wild run-ups in borrowing costs. The Federal Reserve has all but pledged to keep its main interest rate at 0 to 0.25 percent at least through 2014.
The new rate shaves down Zuckerberg's monthly payment considerably. His previous mortgage had a 1.75 percent interest rate, making his house payment about $21,256 a month. The new rate pushes his payment down to around $19,275, saving him almost $2,000 a month.
It seems even billionaires can be budget savvy.
Meg Handley is a business reporter for U.S. News & World Report. You can reach her at mhandley@usnews.com and follow her on Twitter.
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