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Why bother with a mortgage when you have billions of dollars? Why even fill out a loan application when you could simply pay cash for any house on the market?
That’s the question readers might ask when they read that Jay-Z and Beyoncé took out not one, but two mortgages on their $88 million Bel-Air mansion, according to The Daily Mail (1).
The property is the crown jewel in his reported $313 million real estate portfolio, which also includes a palatial home in the Hamptons, a sprawling Malibu mansion and an elegant penthouse in New York.
The couple is reportedly worth around $4 billion, but they took out a $57.8 million mortgage on the property in 2025 (2). And this was after securing a $52.8 million mortgage four years earlier.
Are the music moguls now simply bankrupt billionaires, as some online commentators have speculated, or is this a clever real estate move? Here’s a closer look.
An outstanding liability of approximately $110.6 million on a single property probably sounds mind-boggling, although that figure is only 2.8% of the couple’s combined wealth.
They have achieved quite attractive interest rates for both mortgages. According to The Daily Mail, the new mortgage from Morgan Stanley’s private banking group had a term of 30 years with an interest rate set at 5% for the next 10 years.
The previous mortgage, for its part, was guaranteed by Goldman Sachs at 3.15%. Both rates are notably below the average 30-year fixed mortgage rate of 6.1% for 2026, according to the Federal Reserve (3).
Even if their interest rates were closer to average, their loans would still have unlocked some key financial benefits for the billionaire couple.
By borrowing money against an asset they can easily repay, Jay-Z and Beyoncé appear to be following the “buy, borrow, die” playbook. The strategy involves acquiring appreciated assets, such as real estate, stocks or artwork, and borrowing against those assets to create tax-free cash flow. They can then pass the assets on to their heirs (Blue Ivy, Rumi, and Sir) to potentially erase long-term capital gains.
Beyond the tax advantages, this method also helps wealthy families minimize opportunity costs. By borrowing against their mansion, Jay-Z and Beyoncé can invest the $110.6 million they owe in their various business projects or even in the S&P 500, which has returned an annualized return of approximately 16.3% over the past 10 years (4).
Upon his death, the tax basis of the property portfolio would be reset, potentially saving his three children millions of dollars in capital gains taxes.
Other celebrities are also taking advantage of this strategy: Although Paris Hilton’s net worth is between $300 million and $400 million, she and her husband took out a $43.8 million mortgage on their $63 million Beverly Hills mansion in 2025, according to Fortune (5).
But you don’t have to be a billionaire to use leverage as a financial tool.
Read more: Is retirement approaching without savings? Don’t panic, you are not alone. Here are 6 easy ways to catch up (and quickly)
Anyone, regardless of their net worth, can use debt strategically to start building wealth.
The most important part of this strategy is to borrow only to value the assets. For example, buying a property with a mortgage or taking out a business loan to start a new business can help you build capital, while using an expensive personal loan or credit card debt to finance a vacation could destroy your wealth over time.
If investing in real estate seems like a lot of extra work, you might be surprised to learn that you don’t need to take out a mortgage to benefit from the real estate market.
You can get into real estate by investing in vacation home stocks and rental properties through Arrived.
Backed by world-class investors like Jeff Bezos, Arrived allows you to invest in vacation and rental property stocks, earning a passive income stream without the extra work that comes with owning your own rental property.
To get started, simply browse their selection of vetted properties, each chosen for their appreciation and income-generating potential.
Once you choose a property, you can start investing with as little as $100.
Beyond vacation homes and rentals, you might also consider greater real estate opportunities.
Accredited investors can take advantage of this approach through platforms like Lightstone DIRECT, which give you access to institutional-quality multifamily and industrial real estate, with a minimum investment of $100,000.
Founded in 1986 by David Lichtenstein, Lightstone Group is one of the largest private real estate investment firms in the United States, with more than $12 billion in assets under management.
For nearly four decades, his team has delivered strong, risk-adjusted performance across multiple market cycles, including a historical net IRR of 27.6% and a historical net equity multiple of 2.54 times on investments made since 2004.
With Lightstone DIRECT, you get access to that proprietary transaction flow.
Here’s the kicker: Lightstone invests at least 20% of its own capital in each deal, about four times the industry average.
With skin in the game, the company ensures that its interests are directly aligned with those of its investors.
The power couple also invests in a museum-worthy art collection, has stakes in luxury brands like D’USSÉ and Armand de Brignac, and owns the rights to their hit-filled music catalogs to achieve their $4 billion net worth (6).
Billionaires have long built a portion of their portfolios in an asset class with low market correlation and strong recovery potential: post-war and contemporary art.
Now, with Masterworks, you can buy fractional shares in multi-million dollar works by icons like Banksy, Picasso and Basquiat, and invest like Jay and Bey do.
Masterworks has sold 25 works of art so far, generating annualized net returns of 14.6%, 17.6% and 17.8%.*
Moneywise readers can get priority access to branch out with art – skip the waitlist here.
Past performance is not indicative of future returns. Investing involves risk. See important Regulation A disclosures at Masterworks.com/cd
We rely only on verified sources and credible third-party reports. For more information, see our editorial guidelines and ethics.
Daily Mail (1); Cosmopolitan (2); St. Louis Federal Reserve (3); S&P 500 Global (4); Fortune (5); Robb Report (6)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
