The news about the Facebook founder taking out a mortgage loan with an interest of just 1% a year has made headlines in the international press because he practically borrowed for free, given that the interest rate is three times lower than the average interest rate on dollar loans in the US and half the US inflation.
Zuckerberg refinanced his $6 million loan (equivalent to EUR4.9 million) at an interest rate of 1.05%, so the monthly installment over 30 years is around $19,000 (EUR15,000). At the end of the contract the CEO of Facebook will pay to the bank a total of $6.9 million (EUR5.2 million at the current exchange rate).
If the head of Facebook had taken out a loan in euros or in lei with a Romanian bank, he would have ended up paying as much as double the amount he borrowed. A mortgage loans in euros on the Romanian market charges an average interest rate of 5% a year, which means the ultimate amount to be repaid would have been EUR9.4 million.
Loans in lei are even more expensive, at an average interest rate of 7% a year, the monthly installment on a RON22-million loan (equivalent to $6 million) would be RON146,000 (EUR39,000). The overall amount due in the end would exceed RON52 million ($14 million).
(English version by Daniela Stoican)