Post by Forever Sunshine on Jul 17, 2012 18:28:04 GMT -5
Mark Zuckerberg uses an adjustable-rate mortgage. Should you? Probably not.
When the billionaire Facebook founder refinanced his mortgage with First Republic Bank earlier this year, he scored an adjustable-rate loan that started with a 1.05% rate in May, according to Bloomberg. The rate resets monthly and is equal to the London Interbank Offered Rate, or Libor, plus 0.8 percentage point. The one-month Libor rate was recently 0.25%.
By one measure, the loan is so cheap that Zuckerberg is making money on it. The inflation rate was 1.7% over the year through May, according to the Labor Department. That's a modest rate by historical standards, but nonetheless, it's high enough to suggest that the dollars Zuckerberg owes are losing value faster than his loan is accruing interest.
money.msn.com/personal-finance/article.aspx?post=05a79e37-ee48-4e26-af04-69b86d133120
When the billionaire Facebook founder refinanced his mortgage with First Republic Bank earlier this year, he scored an adjustable-rate loan that started with a 1.05% rate in May, according to Bloomberg. The rate resets monthly and is equal to the London Interbank Offered Rate, or Libor, plus 0.8 percentage point. The one-month Libor rate was recently 0.25%.
By one measure, the loan is so cheap that Zuckerberg is making money on it. The inflation rate was 1.7% over the year through May, according to the Labor Department. That's a modest rate by historical standards, but nonetheless, it's high enough to suggest that the dollars Zuckerberg owes are losing value faster than his loan is accruing interest.
money.msn.com/personal-finance/article.aspx?post=05a79e37-ee48-4e26-af04-69b86d133120
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