Zuckerberg’s Mortgage Loan Gives New Meaning to the 1% [View all]

[Lint Head]

http://www.bloomberg.com/news/2012-07-16/zuckerberg-s-loan-gives-new-meaning-to-the-1-mortgages.html
The Facebook Inc. (FB) founder refinanced a $5.95 million mortgage on his Palo Alto, California, home with a 30-year adjustable-rate loan starting at 1.05 percent, according to public records for the property.

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, said Greg McBride, senior financial analyst with Bankrate Inc., a North Palm Beach, Florida-based firm that tracks interest rates. Large increases are unlikely anytime soon with the Federal Reserve signaling it will keep interest rates near zero for at least two years.

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Financial advantages that billionaires have over the rest of us is unfair. Using a a 1% interest loan one can borrow at 1% then invest the loan and make money even at +2% or more. Why would a millionaire even need a loan. Banks borrow at this rate.

I think the percentages should be reversed. Why should a non billionaire who needs a loan have to pay 4% to 32%? A wealthy person can more afford to pay a higher rate than someone with less money. No wonder people are upside down with loans.