Beyonce and Jay Z bought an $88 million house - here's why their $52 million mortgage might be a smart business decision

Christopher Polk/Getty Images for NARAS

The billion-dollar couple is making monthly payments of nearly $150,000.

• Beyoncé and Jay Z purchased a Bel Air estate for $88 million.
• They put 40% down and financed the rest with a $52.8 million mortgage from Goldman Sachs.
• With historically low mortgage rates, taking out a loan allows them to put their cash to better use.

Billion-dollar power couple Beyoncé and Jay Z have finally put down roots in Los Angeles.

The entertainment moguls recently bought a two-acre hillside estate in Bel-Air for $88 million, making it the sixth-priciest home purchase in the history of Los Angeles.

In addition to 30,000 square feet of living space housed in six glass-walled structures, the ultra-modern property has four outdoor pools, a spa and wellness center, a full-sized basketball court, and a 15-car garage.

Despite holding Forbes' title of the highest-paid celebrity couple in the world with a combined fortune of $1.16 billion, Beyoncé and Jay Z took out an eye-popping $52.8 million mortgage from Goldman Sachs for the purchase, the Los Angeles Times first reported.

That leaves the couple with a huge monthly payment of $149,600, according to the loan document, which is public record. The national median home value, for comparison, is $200,700.

Keeping their mounds of cash liquid could be a smart business decision. For starters, it helps to maintain their lavish lifestyle. But it could also allow them to continue investing heavily in tech companies, presumably earning returns greater than the amount of interest they'll pay, considering mortgage rates are still historically low in the US.

"Depending on how their portfolio looks - what they've invested in - I think there could be a huge benefit [to Beyoncé and Jay Z], it gives them flexibility, and they could pay the mortgage off any time," Robert Cohan, managing director at Carlyle Financial in Los Angeles, told Business Insider.

Based on mortgage applications for new home purchases in July from the Mortgage Bankers Association, the average American applied for a loan of $329,483. At 4% interest over 30 years, that's a monthly payment of $1,573. Beyoncé and Jay Z will be paying about 95 times as much for their new abode.

Cohan said the Carters likely had a prior relationship with Goldman Sachs, making it easier to secure the massive loan at a low interest rate.

"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," Cohan said.

The couple put down 40% of the purchase price - $35.2 million - in cash, and financed the mortgage through two separate trusts, public record shows. Their loan is a five-year ARM with an initial rate of 3.4%, meaning the rate will stay the same for the first five years, and then adjust annually based on Libor, a benchmark rate used by the world's leading banks. Until then, they'll be making interest-only payments.

In Los Angeles, and a handful of other pricey markets across the country, jumbo mortgages are issued for loans greater than $636,150. Supersized mortgages are the norm in Bel Air, the ritzy LA neighborhood the Carters will soon call home, where the median home value is $3.25 million, according to Zillow.

For a homebuyer looking to secure a jumbo mortgage, at least two years of tax documentation proving steady income is required, as well as a credit score above 720, a favorable debt-to-income ratio, and enough cash in the bank to cover a year of payments. Cohan said Beyoncé and Jay Z may have had to provide more documents as proof of cash flow, if the bank didn't already manage their money.

Ultimately, while there's some risk associated with lending a mortgage this size, he said, the potential benefit to the bank is high if Beyoncé and Jay Z park their other assets there as well.

"Large financial institutions - Morgan Stanley, Goldman Sachs - are fighting for these types of clients to manage their money where they can have access to this opportunity," Cohan said.