Even the world’s richest people sometimes need a mortgage.
But financial experts say taking out a mortgage—even when you could easily pay cash—can actually be a smart wealth strategy.
One of the main reasons is that most of the wealth held by UHNW people is tied up in investments, stocks, and bonds, and they don’t keep as much liquid cash on hand.
“If they believe their investments will yield a greater return than the interest they’re paying on a mortgage, it makes more sense to finance the property,” Kastanis added. “It’s less about the cost of the loan itself and more about optimizing where their money is placed.”
Many celebrities and wealthy buyers take the same approach.
For billionaires and everyday buyers alike, the decision ultimately comes down to how they want their money working—locked into a house, or invested elsewhere.
Is it better to lock it into a house—or invest elsewhere?
“The takeaway for the average buyer isn’t to mimic their precise approach, but to understand the principle,” Harlow said. “Sometimes the smartest financial move isn’t paying everything off, but keeping your money flexible and working for you.”
