Power couple Beyoncé and Jay-Z have recently taken out a $57.75 million mortgage on their Bel Air mansion, according to The Daily Mail. Considering their considerable wealth, folks are scratching their heads at this news — but we have the tea for you.
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The Carters are worth an estimated $4 billion between them, according to Cosmopolitan, so it’s not as if the artists can’t stand on their own two feet. So why would they need to take out a mortgage on their home? Well, it’s not something they needed to do, but is instead likely something they wanted to do.
Beyoncé and Jay-Z aren’t the only ultra-rich celebrities to have taken out a mortgage on their home; billionaires like Mark Zuckerberg do this too, and it’s all about cash flow. By taking out a mortgage, the Carters can keep their money liquid, which would allow them to have cash for multiple investments rather than pouring it all into one fixed investment like real estate, according to Money.ca, a Canadian financial news site.
In fact, this is the third time that the couple has taken out a loan on their Bel Air mansion. They first took out a $52.8 million mortgage with Goldman Sachs when they bought the home in 2017, and refinanced in 2021 for the same price with the same lender, before taking out another loan this summer, according to The Daily Mail.
In a 2017 Business Insider article, Robert Cohan, the president of Carlyle Financial, told Business Insider that the mortgage could be “a huge benefit” to Beyoncé and Jay-Z because it allows them flexibility. Cohan also explained that to take out such eyebrow-raising loans, the couple would already have a relationship with the bank they are borrowing from:
“In regards to a mortgage this size — $15 million and up — you get into a position where a lender will only look at a mortgage this size if there is a relationship there. They won’t look at it on a transaction basis.”
Not to mention the tax savings that the couple could also be making by having a mortgage. A mortgage would make Bey and Jay eligible for the Mortgage Interest Deduction (MID), which allows them to write off some of the interest on their loan, put it in their tax return and lower their taxable income, according to CNBC.
With Beyoncé set to take home $300 million from her Cowboy Carter Tour, according to Cosmopolitan, and with Jay-Z’s ever-expanding business empire, it looks like the Carters are gearing up to invest their money into more liquid assets and keep their cash flowing and growing.
To put it in simple terms for us non-billionaires, the Carters are playing chess, not checkers.
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