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Post by longjohn on May 15, 2015 12:37:26 GMT
The headline rate on Feeling Comfortable's home page has increased from 6.4% on 16 April to 7.0% today. That's a huge rise in four weeks. Is this an election effect or are we in for a longer period of higher rates?  John |
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SteveT
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Post by SteveT on May 15, 2015 12:56:15 GMT
My first guess was it could be down to recent property loans receiving 2%CB almost by default over the last 3 - 4 weeks, but there's no mention in the explanatory notes as to whether Fiendish Calculations include CB in their estimated average return for the last 100 loans.
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sl75
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Post by sl75 on May 15, 2015 12:57:38 GMT
The headline rate on Feeling Comfortable's home page has increased from 6.4% on 16 April to 7.0% today. That's a huge rise in four weeks. Is this an election effect or are we in for a longer period of higher rates? Probably neither - there was a glut of large property loans with 2% CB which I would expect to have diverted large quantities of funds from the variable-rate auctions leading to higher rates on these.
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sl75
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Post by sl75 on May 15, 2015 12:59:10 GMT
My first guess was it could be down to recent property loans receiving 2%CB almost by default over the last 3 - 4 weeks, but there's no mention in the explanatory notes as to whether Fiendish Calculations include CB in their estimated average return for the last 100 loans. From the homepage: "It is calculated by taking the gross interest rate less fees and estimated bad debts that will occur in the future for each of the last 100 loans accepted on the marketplace." i.e. this does NOT directly include cashback.
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SteveT
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Post by SteveT on May 15, 2015 13:04:00 GMT
My first guess was it could be down to recent property loans receiving 2%CB almost by default over the last 3 - 4 weeks, but there's no mention in the explanatory notes as to whether Fiendish Calculations include CB in their estimated average return for the last 100 loans. From the homepage: "It is calculated by taking the gross interest rate less fees and estimated bad debts that will occur in the future for each of the last 100 loans accepted on the marketplace." i.e. this does NOT directly include cashback. Yes, I saw that but, given the headline Homepage figure is designed to entice in new lenders, it strikes me as odd if they're deliberately leaving out the positive effect of CB (which represents a significant portion of the total return on property loans). I wondered if they might be including CB but haven't yet got around to updating the explanatory notes.
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blender
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Post by blender on May 15, 2015 13:31:18 GMT
The cash back is a promotion from FC to induce lenders to enter the loan, not actually part of the loan agreement with the borrower. I do not think it would be right to include a temporary promotion in the calculation (and there could be income tax implications). So in this case FC have probably deliberately excluded cash back and taken a small hit in the number.
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