Sydney Lake
4 min read
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Despite Paris Hilton’s high net worth, she and her husband reportedly took out a $43.75 million mortgage for their $63 million Beverly Hills mansion, a move more common among ultrawealthy individuals than one may think. Experts say wealthy buyers often keep their cash liquid and use mortgages as a strategic tool to maximize flexibility and invest in higher-yield opportunities.
Considering Paris Hilton is worth an estimated $300 million to $400 million, it might seem odd that she reportedly took out a mortgage on her recent home purchase.
Hilton, whose vast wealth comes from 19 product lines, real estate, media and entertainment, brand partnerships, and her reality show, The Simple Life, bought actor Mark Wahlberg’s former estate in Beverly Hills earlier this year for a whopping $63 million.
But what wasn’t reported at the time was that Hilton and her entrepreneur husband, Carter Reum, reportedly took out a mortgage on the home, which might seem like an unusual move for the 44-year-old hotel heiress. And what’s seemingly even more strange is they reportedly took out the loan after they had already bought the 12-bed, 20-bath home, which shows a $43.75 million mortgage with JPMorgan Chase at an interest rate of 5.25%.
But this type of arrangement isn’t as rare as it may seem, real-estate experts say.
“It surprises many people, but it’s actually quite common for the mega-wealthy to take out mortgages—even when they could write a check for the full purchase price,” Evan Harlow, real estate agent at Maui Elite Property, told Fortune.
In fact, public records show ultrawealthy celebrities including Beyoncé, Jay-Z, Elon Musk, and even Mark Zuckerberg have financed their homes.
“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.”
While it may seem counterintuitive to take out a mortgage in today’s market, where rates are still hovering in the 6% range, it can actually be a savvy move for ultrahigh-net-worth individuals.
In fact, just because someone has the net worth to buy a home outright, that “doesn’t mean that’s how they want to allocate their cash,” Miltiadis Kastanis, director of luxury sales for Compass, based in South Florida, told Fortune.
“Ultrahigh-net-worth individuals think differently about liquidity and leverage; they’d rather keep their money working for them in investments, businesses, or even art, rather than tying it all up in one property,” said Kastanis, who has represented high-profile celebrities in real estate transactions.
