aju
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Post by aju on May 21, 2019 16:30:06 GMT
I probably am misunderstanding what MR is then. I just clicked on Invest and it said I would lend at 5.1% if I clicked the right button. However if I made my own choice I could have lent at 5.2% before I hit the wall which when I wrote that was at 5.3%. How would I lend at MR on any given day. Clearly I have misunderstood MR persee. MR is for reinvestments set automatically and is based on an average rate, previously for previous day from some time in morning to 10PM, now from previous 28 days.
Separately there is the "lend it now" rate that is the highest outstanding offer (often from RS rather than a potential borrower directly). This latter sucks in unsophisticated money, but shouldn't create a stack of unlent funds. In contrast, theMR is the rate that the majority of the recycled funds are put on at after repayment runs. This latter is what has built up as new money has been put on at lower rates and so it has remained largely unlent.
HTH
PM
Yeah thanks propman, I've just added the historic MR tables into my spreadsheets so I can see it clearer in my lending tables. The vlookup being a date is much accurate than some data I have. So now I can see what is happening and my lending is not as good as the MR on some loans and in the best case its 0.3-0.4 better. Swings and roundabout but I took a while before I realised to wait until Sunday/Monday rates and that was before they switched to the so called "weighted" previous day average. I wonder what "weighted" means. I've never actually used the MR to relend though but perhaps I should be when it settles. So I guess I've been lending on the dumb money side, but at least I now understand another of the idiosyncrasies of this platform - till they switch tactics again .
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aju
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Post by aju on May 21, 2019 16:46:19 GMT
Where is that written up? What, the bank rates? Nowhere as far as I know, but in the last 12 months I've had: Tesco cutting from 3% to 1%, TSB cutting from 5% to 3%, Lloyds cutting from 3% to 1.5%, Santander cutting from 3% to 1.5%, as well as the monthly saver rates being cut too. Even Halifax cut their reward down to £2 from £3 (pretty pathetic considering it used to be £5 about 10 years ago!). edit: just realised you might mean Tesco in particular. Here - from 14th June. Snap, its a real annoyance but I guess it couldn't last Mrs Aju and myself made quite a bit on the Halifax £5 and £3 especially with also claiming the tax as well at various times during the cycle of each of our retirement from normal work. We also had as many accounts we could in the relevant others you mention at various times but pulled back on most of them when Tescos removed their easy DD setup on savings accounts last year. Have closed most of these now and don't get too stressed doing the DD ones anymore, not really worth it in my view. We keep excess cash funds in Marcus lately but that will only last 12 months or so and we keep to levels I am comfortable for both shares (for good dividend returns) and P2P for both normal and ISA's accounts etc. We are also using RegSavers with 5% and 3% levels on some of the accounts that we have too. We are propping up our work pensions these days quite well so far but may have to rework things again when the SP starts arriving in a couple of years or so, tax wise for me at least although we have reset out invest p2p across to ISA's so thats covered quite well. Edit: TSB rates are cut July 2nd.
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Post by propman on May 22, 2019 12:27:15 GMT
MR is for reinvestments set automatically and is based on an average rate, previously for previous day from some time in morning to 10PM, now from previous 28 days.
Separately there is the "lend it now" rate that is the highest outstanding offer (often from RS rather than a potential borrower directly). This latter sucks in unsophisticated money, but shouldn't create a stack of unlent funds. In contrast, theMR is the rate that the majority of the recycled funds are put on at after repayment runs. This latter is what has built up as new money has been put on at lower rates and so it has remained largely unlent.
HTH
PM
Yeah thanks propman , I've just added the historic MR tables into my spreadsheets so I can see it clearer in my lending tables. The vlookup being a date is much accurate than some data I have. So now I can see what is happening and my lending is not as good as the MR on some loans and in the best case its 0.3-0.4 better. Swings and roundabout but I took a while before I realised to wait until Sunday/Monday rates and that was before they switched to the so called "weighted" previous day average. I wonder what "weighted" means. I've never actually used the MR to relend though but perhaps I should be when it settles. So I guess I've been lending on the dumb money side, but at least I now understand another of the idiosyncrasies of this platform - till they switch tactics again . In "normal times" you should get >MR within a couple of days, buit this will not be the case where there is a backlog at MR. For some time now (post late March) no lending has happened above MR and MR lending has taken several weeks, so 0.1% beolow MR is the best obtainable in the near future. At some stage the backlog will clear and higher rates will become avilable. It is only after then that MR will finally stabilise and might start to increase.
- PM
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scc
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Post by scc on May 24, 2019 7:12:00 GMT
In a lending environment where the provision fund is materially weaker than it ever has been, I find the buoyant demand mildly (although not very) surprising. I'm not yet selling out, just withdrawing as repayments come in, but certainly nearer to withdrawing everything than topping up. Which is a shame, as the ongoing slaughtering of all decent bank account rates (e.g. Tesco disappearing shortly), leaves something of a dent in my overall returns. I too am withdrawing as repayments come in. I'd rather put it in premium bonds while I wait for better rates on ratesetter to reappear. This stuff is risky, it should attract a decent rate imo.
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voss
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Post by voss on May 26, 2019 15:07:37 GMT
Spike underway in Rolling, stuttering around 3.7%. I guess it would normally peter out today, Sunday, but given the BH, it might build again tomorrow.
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robski
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Post by robski on May 28, 2019 12:02:38 GMT
Think we may see the chances of beating market rate return this week. The 5 year backlog is now down to £1.3M. whilst nothing seems to be repaying yet today from the bank holiday its clearly significantly down on last week. Was at £5M last Monday iirc. Seemingly quite high take up, or lots of people withdrawing, both of which I am happy about
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Post by Deleted on May 28, 2019 14:16:17 GMT
There is now less than £1m in the 5 year at 5.2%.
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Post by propman on May 28, 2019 14:49:46 GMT
There is now less than £1m in the 5 year at 5.2%. Theonly meaningful number will be after the allocation of the 4 days of repayments due today as RS are likely to hold off lending until after this (see the £670k+ requested but unmatched in 1 year). Of course I hope that we will soon see the MR barrier breached, but I fear that it won't be before the weekend.
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robski
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Post by robski on May 29, 2019 11:19:05 GMT
5 year is now down to £300k at 5.2%
Yesterday was very late in processing, mine is now completed, but I am unsure if the repayments being added to the queue at MR have happened.
I have no repayments for today (and due some) so suspect yesterday is still not quite complete and today is on hold until it has been completed.
No mater what however there appears to be some real volume going through, there was something like £4M at 5.2% going into the weekend and its almost all gone.
I would expect at least £1M to have come in yesterday, if not more, so suspect the MR funds have not yet been applied to the "pot" Still looks like the short term surplus has been dented and we may start to see rates "normalising"
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Post by propman on May 29, 2019 14:52:29 GMT
5 year is now down to £300k at 5.2% Yesterday was very late in processing, mine is now completed, but I am unsure if the repayments being added to the queue at MR have happened. I have no repayments for today (and due some) so suspect yesterday is still not quite complete and today is on hold until it has been completed. No mater what however there appears to be some real volume going through, there was something like £4M at 5.2% going into the weekend and its almost all gone. I would expect at least £1M to have come in yesterday, if not more, so suspect the MR funds have not yet been applied to the "pot" Still looks like the short term surplus has been dented and we may start to see rates "normalising" MR band was <£100k more than the offers shown for funding. The funding for the week has been high, but don't know how much is in 5 yr market. But the 1 year market lent at 4.7%, considerably above MR yesterday so the backlog there has been cleared, while unless there is additional MR funds due to be added soon, there may well be sufficient to clear this backlog too. Of course there might be additional funds due to be credited yesterday and today that will create a significant amount at MR again soon, but importantly it is nolonger only sensible to lend above MR if you are prepared to wait and my weekend prediction was probably wrong.
A further ~£300k has recently been credited at MR so some funds have been added, but we don't know whether this is now up to date, so its "watch this market" time.
What will be interesting is to see the impact of the breach of the MR backlog on future lending and ultimately the impact on the MR. Every day a day drops out of the average where lending averaged 5.4% or so when most recent lending has been at 5.1%. This has resulted in regular MR reductions perpetuating the cycle (ie disparity maintained as average now lowers current MR as the MR 28 days ago was lowered). "Lend it now" and MR money will stay at similar rates after the MR "breach". The question is how much is lent by lenders emboldened to put on offers above MR or of older offers made above MR. This needs to outweigh the other money by enough to offset the MR & "Lend it now" by sufficient to raise the average raet for the day to that of 28 days before before the decline can be halted. I fear this might take some time with an intermediate step of lengthening times to the declining rates meaning that the differential in MR for 28 days is gradually reduced before the higher rate lending can bridge the gap.
In addition, there seems to be money that is generally lent at 0.5% intervals (and some at 1% intervals). It appears that the majority of this is still at 6%. It is a race for some lending to jump to this or something close to discourage these people from lowering offers to 5.5% or even 5% as this could further delay the start of MR rises.
Last year there developed a gap between MR and the first higher rate significant user selected offers were made at. This meant the lending rate jumped once each days MR relending had been completed. It may take this again before the MR starts to rise again. This in turn only happenned once the intermediate rates were utilised by lending exceeding MR. I suspect the money at 6% will mean much is placed at 5.9% once higher rates are achieved. This would require nearly £2m of >MR lending to start this process. The key will be how the higher lending volumes hold up and whether currently withdrawn (& available but undeployed) funds are attracted back at these rates.
- PM
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robski
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Post by robski on May 30, 2019 7:59:56 GMT
Well it seems I was right and the addition of MR rate funds to the 5 year was somewhere behind. It looks to me like Tuesday and Wednesday both went in together (well possibly a short period apart) Was probably some mechanism that needed to be triggered after the Tuesday repayment cycle and as that went super late into the day, my guess would be the job/process didn't happen.
That being said there is £1.3M on 5.2% which means rather than undercutting you can get 5.2% with likely no much more than 1 day delay. So having to undercut is just about done now. I mean who would undercut by 0.1% to gain a day, no one rational.
I can see that maybe next week we will again be kind of pegged around 5.2 still as start of the month and hence lots of repayments, but a week or two into June I think we will see rates start to rise a bit. Not MR, but the opportunity to get better rates before the MR is placed (at end of the repayment run) most days, and potentially later in the day when the MR is depleted.
I dont see the rate going up quickly though, I think it will maybe spike a bit for a while, but that due to the volume thats been lent at 5.2% (and probably 5.1%) we will see probably 2 weeks at least before MR could move to 5.3%.
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aju
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Post by aju on May 30, 2019 8:32:47 GMT
Well it seems I was right and the addition of MR rate funds to the 5 year was somewhere behind. It looks to me like Tuesday and Wednesday both went in together (well possibly a short period apart) Was probably some mechanism that needed to be triggered after the Tuesday repayment cycle and as that went super late into the day, my guess would be the job/process didn't happen. That being said there is £1.3M on 5.2% which means rather than undercutting you can get 5.2% with likely no much more than 1 day delay. So having to undercut is just about done now. I mean who would undercut by 0.1% to gain a day, no one rational. I can see that maybe next week we will again be kind of pegged around 5.2 still as start of the month and hence lots of repayments, but a week or two into June I think we will see rates start to rise a bit. Not MR, but the opportunity to get better rates before the MR is placed (at end of the repayment run) most days, and potentially later in the day when the MR is depleted. I dont see the rate going up quickly though, I think it will maybe spike a bit for a while, but that due to the volume thats been lent at 5.2% (and probably 5.1%) we will see probably 2 weeks at least before MR could move to 5.3%. I was looking this morning around 8:30 and the lending was down as low as 4.1% but then it jumped up to 5.1% within minutes and its now flipping quite a bit. I agree with you about the undercut and have set some relend at 5.3% to see if the 1.3m does break through to 5.3. Problem is i'll be at the back end of 5.3. which is 1.8M.
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Post by propman on May 30, 2019 10:12:28 GMT
The question is whether the lending at 5.1% & below moves the average down again as this has been much of the lending over the last 8 days, this coupled with the loss of the money lent at 5.4/5.5% at the beginning of the average period. It depends how they do the average, ie whether the current higher lending volumes are weighted into the average. In addition to the £1.3m at 5.2%, there is a furthe £700k at 5.3/5.4%, so even when the MR money is utilised the rates aren't going to shoot up. Personally I think it would be worth the gamble that money at 5.2% will be lent fairly quickly, but this is below my current minimum. But I was caught by the MR reducing when the rate moved down to 6% and 5.9%, so people prioritising quick relending might like to split their offers.
The other thing worth considering is tha the 31st is the lowest repayment run and 1st the highest, while the monthly lending is at its height at this time of the month, so while Friday and the weekend are likely to see an improvement which may last for most of Monday, expect a large amount on the market late Monday/early Tuesday. Th eimprovement in week 2 is likel;y to be after another reduction in MR. Still, nice to see the 1 year rise, although i will be happier on tghe second rise at the average may never have sunk much below the previous rate and so the increase might be a tiny part of 0.1%.
- PM
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robski
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Post by robski on May 30, 2019 10:39:59 GMT
The question is whether the lending at 5.1% & below moves the average down again as this has been much of the lending over the last 8 days, this coupled with the loss of the money lent at 5.4/5.5% at the beginning of the average period. It depends how they do the average, ie whether the current higher lending volumes are weighted into the average. In addition to the £1.3m at 5.2%, there is a furthe £700k at 5.3/5.4%, so even when the MR money is utilised the rates aren't going to shoot up. Personally I think it would be worth the gamble that money at 5.2% will be lent fairly quickly, but this is below my current minimum. But I was caught by the MR reducing when the rate moved down to 6% and 5.9%, so people prioritising quick relending might like to split their offers.
The other thing worth considering is tha the 31st is the lowest repayment run and 1st the highest, while the monthly lending is at its height at this time of the month, so while Friday and the weekend are likely to see an improvement which may last for most of Monday, expect a large amount on the market late Monday/early Tuesday. Th eimprovement in week 2 is likel;y to be after another reduction in MR. Still, nice to see the 1 year rise, although i will be happier on tghe second rise at the average may never have sunk much below the previous rate and so the increase might be a tiny part of 0.1%.
- PM Yes definately tricky to specifically predict the moves. The main factor of course remains the lending vs available funds (through whatever source). If the available funding is noticeably higher than lending I think you will see a sharp drop in rates as we did since ISA season, particularly if the MR is the main lending rate, as believe once you get a large amount backed up a lot will look to undercut to get it lent. If the lending is much higher than the MR then it will start eating into the higher rates. The MR itself is going to smooth out the peaks and troughs on average, but there will come times when you can see lending above the MR. A lot will depend on ratios of people willing to lend at what rates in comparison to the MR, and how long they will defer the lending for what extra %. Eg on Monday if the payment run takes a while, and if the lending over the weekend is robust I can see the actual rate achievable going 0.1-0.3% over what the MR will be listed at once all the monies are put back into the lending queue. Its definately possible we will see 5.1% I think. Thats the minimum, as there will have been quite a lot lent at that level, so its whether enough has been to tip the rate that 0.1% lower compared to the amount lent at 5.2% as the higher rates fall out of the calculation.. well thats just guess work I guess. If the lending keeps outpacing the MR lump then to my mind what your going to see is ever increasing gap between whats possible if timed correctly, and a daily MR that keeps temporarily dragging down the actual rate for periods. Going to be interesting to see how it all plays out!
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