Billionaires Elon Musk and Mark Zuckerberg used mortgages to buy multimillion-dollar mansions. Here’s why that’s a savvy financial decision
The richest man in the world, Elon Musk, is on pace to become the first trillionaire—or perhaps already is—but he has taken out a mortgage, something that the majority of regular Americans must do.
The Los Angeles Times reports that the CEO of Tesla has taken out multiple massive mortgages on five residences in California, including $61 million from Morgan Stanley. It may be hard to comprehend why he would borrow tens of millions of dollars to purchase real estate when it is only a small portion of his current net worth of $703 billion.
However, according to financial experts, taking out a mortgage might actually be a wise wealth plan, even if you could pay cash.
Why mortgages are still taken out by wealthy buyers
One of the primary causes is that UHNW individuals have less liquid cash on hand and the majority of their wealth is invested in stocks, bonds, and investments.
Miltiadis Kastanis, executive director of sales at Compass, told Fortune that "ultrahigh-net-worth individuals think differently about liquidity and leverage." "Rather of putting all of their money into one property, they would prefer to keep it working for them in enterprises, investments, or even art."
The seventh richest man in the world, Mark Zuckerberg, the CEO of Meta, has also benefited from mortgages. According to CNBC, Zuckerberg refinanced his Palo Alto house in 2012 with a 30-year, 1.05% adjustable-rate mortgage. It did not make sense to have almost $6 million invested in a house because the mortgage cost him almost nothing at such a low rate. Additionally, borrowing was particularly appealing in the 2010s when interest rates were extremely low. Many affluent purchasers secured mortgages at rates significantly lower than those of today.
t makes more sense to finance the home if they think their investments will give a bigger return than the interest they are paying on a mortgage," Kastanis continued. "It is more about maximizing where their money is placed than it is about the cost of the loan itself."
For those who itemize their taxes, mortgage interest on loans up to $750,000 may also be tax deductible. Zuckerberg may probably deduct at least some of his mortgage interest, which lowers borrowing expenses even though his mortgage exceeded that amount.
According to Islay Robinson, founder and CEO of mortgage brokerage Enness Global, "mortgages can allow for tax efficiency in some jurisdictions, as interest payments may be deductible," he told Fortune. "And in high-inflation circumstances, borrowing now and repaying later is advantageous since money loses value with time."
Celebrities employ the same tactic.
The same strategy is used by many celebrities and affluent consumers.
Consider Paris Hilton, who obtained a mortgage for the $63 million Beverly Hills property she purchased from Mark Wahlberg. Hilton's estimated value ranges from $300 million to $400 million.
Even more intriguing is the fact that she and her spouse, Carter Reum, allegedly obtained the loan after purchasing the 12-bedroom, 20-bathroom house, which has a $43.75 million mortgage with JPMorgan Chase at a 5.25% interest rate.
Evan Harlow, a real estate agent at Maui Elite Property, recently told Fortune, "It surprises many people, but it is really fairly normal for the mega-wealthy to take out mortgages—even when they could write a check for the whole purchase price."
Benefits of taking out a mortgage in terms of taxes and inflation
Ultrawealthy purchasers frequently take out loans guaranteed by their investment portfolios, which is another reason they borrow money instead of paying cash. These loans, which are referred to as securities-based lending, let customers borrow against stocks or other assets without having to sell them and pay capital gains taxes. These kinds of loans are frequently marketed to affluent customers by large banks.
Does India want to turn Great Nicobar into a 'Strait of Hormuz' to counter China?
Pitch mixers are being used to build a road through forested areas on the outskirts of Campbell Bay as part of the Great Nicobar Island project. The environmental impact of this mega development project by India's Narendra Modi government is a matter of debate. 26 March 2026
Great Nicobar Island is located in the southernmost part of India. It is closer to the coasts of Thailand, Malaysia and Indonesia than to the Indian mainland.
The island is about the same size as Hong Kong. However, no Indian prime minister has visited it since Indira Gandhi in 1984.
India has not even conducted a complete census of the island. Therefore, the number of inhabitants there is based on estimates. According to the latest estimates, less than 10,000 people live there.
Despite all this, the island has now become one of the centers of attention in international politics. Prime Minister Narendra Modi's government wants to develop Great Nicobar as a major strategic and economic base in the Indian Ocean. For this, they have undertaken a plan worth 11 billion dollars.
The Modi government has approved the development of a transshipment port, a civil-military airport, a power plant, tourism infrastructure and a township for 350,000 people on the island. The government claims that such a huge amount of money is being invested in it considering the economic importance of maritime trade.
The island has strategic importance. Because it is located right at the mouth of the Strait of Malacca....No one can object to it being developed as a commercial hub.
Shekhar Sinha, former Vice Chief, Indian Navy
However, in the face of criticism from global environmental organizations and opposition leaders in New Delhi, the Indian government has recently changed its tune. Now they are promoting the government's plan as a centerpiece of achieving the country's strategic goals.
However, after tensions between the United States and Iran over the Strait of Hormuz, the Modi government's plan for Great Nicobar has intensified. The Hormuz crisis has reminded New Delhi of the importance of establishing bases in the surrounding area to establish military and economic control over a vital waterway. In the case of Great Nicobar, that waterway is the Strait of Malacca, through which one-third of the world's trade and seaborne oil is transported.
Located in the southeastern Bay of Bengal, Great Nicobar Island is about 1,600 kilometers (994 miles) from the Indian mainland. It is very close to the western entrance to the Strait of Malacca.
"This island has strategic importance. Because it is located right at the mouth of the Strait of Malacca. ... If it is developed as a commercial hub, no one will be able to object," Shekhar Sinha, a former vice chief of the Indian Navy, told Al Jazeera.
Jetty on Kachchal Island near Campbell Bay area of Great Nicobar Island. March 30, 2026 Photo: AFP
A vigilant watch against China
Located in the southeastern corner of the Bay of Bengal, Great Nicobar Island is about 1,600 kilometers (994 miles) from the Indian mainland. It is very close to the western entrance to the Malacca Strait.
The island is located along the East-West maritime trade route. This route carries trade and supplies between the Persian Gulf, Europe and various countries in East Asia including China, Japan, South Korea.
The Great Nicobar project is one of the biggest scams and grave crimes against the natural and indigenous heritage of this country in our lifetime.
Rahul Gandhi, Leader of the Opposition in India
The strait is narrowest at the Phillip Channel near Singapore. There, its width is only 2.8 kilometers (1.7 miles). Despite its narrowness, it is a major waterway connecting the Middle East with Southeast Asia.
Although international trade depends on the Malacca Strait, it is most important to China. China imports 80 percent of its crude oil and two-thirds of its total trade through this route.
Due to its geographical location, Great Nicobar Island can become a valuable ‘watchman’ for India to monitor the Malacca Strait.
“It [Great Nicobar] is an excellent place to keep an eye on all ships passing through this strait. It will greatly enhance India’s maritime domain awareness,” said Sinha, a former naval officer.
The Modi government has gradually started acknowledging the strategic importance of the island.
Although international trade depends on the Malacca Strait, it is most important to China. Because China imports 80 percent of its crude oil and two-thirds of its total trade through this route.
A government press release in May said the Great Nicobar project is “a strategic project aimed at strengthening India’s presence in the Andaman Sea and Southeast Asia.”
The release added that “the project is designed to enhance India’s national security, strategic and defence presence, strengthen the economic position of the archipelago and accelerate the overall development of the region.”
A man walks along the Old Shastri Nagar beach on the outskirts of Campbell Bay on Great Nicobar Island. 26 March 2026 Photo: AFP
‘Death penalty’
However, the project was not initially conceived in the official plans of the Indian government. Rather, it was brought forward with the aim of competing with economic zones based on deep sea ports such as Singapore, Colombo in Sri Lanka or Hong Kong.
On the other hand, New Delhi’s plan quickly faced severe obstacles. The islanders have refused to give up their land for the construction of the project. They have even filed several court cases against the government’s plan.
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