Facebook’s Zuckerberg refinances home at 1.05 percent

Feeling pretty good about snagging a refi rate in the 3s, aren’t you?

Think you got a deal, don’t you?

Then listen to this, from Bloomberg: Mark Zuckerberg (you know, the guy in that movie who founded something called Facebook … worth a few mill, er, billion) just landed a 30-year adjustable rate mortgage at the rate of … 1.05 percent.

1.05 percent!

Now this begs a question or two. The first of which may be why a guy with such a stash of cash doesn’t just pull out his wallet and start peeling off hundreds, or whatever, and pay the thing off right then and there.

All right, so his manse in Palo Alto, Calif. cost $5.95 million … still, the guy’s worth nearly $16 billion.

The reason is basic economics. Getting to borrow that much at that low a rate _ sub-inflation _ is like getting the money for free. And the Big Z can get it because he’s a high net worther who is willing to pay a higher rate if the ARM spikes upward. Lots of folks wouldn’t want to take such a chance nowadays.

Here’s a summary of the situation from the report:

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, Fla.-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.

“When you can borrow at a rate below inflation, you’re borrowing for free,” McBride said in an e-mail. “This is the concept of using other people’s money and it preserves financial flexibility for the borrower.”

Just what Zuckerberg needs, more financial flexibility.