|
Post by westonkevRS on Jun 19, 2015 14:26:46 GMT
As I indicated on this forum before, the functionality of "Your Rate" is changing. The blog is here: www.ratesetter.com/blog/article/the_way_we_calculate_the_market_rate_is_changing Change to “Your Rate”
“Your Rate” will become exactly that – those lenders who choose to re-invest at “Your Rate” will have their funds put on the market at that rate, with no other change made." An email was sent to all RateSetter customers with the "Your Rate" set today (this has gone to around 3,500 customers, of which I believe around 2,000 to be active lenders each month). ************** Comrades (westonkev's insertion!),
We hope you enjoy the ability to control the interest rate at which you invest on RateSetter.
We are pleased to inform you that as of 24th June we are making a change to the “Your Rate” re-investment setting, the purpose of which is to make this control simpler.
Currently your money is re-invested at the higher of “Your Rate” (i.e. the rate you have specified) or “Market Rate” (i.e. the rate that is worked out daily at RateSetter looking at the whole market). Once re-set to Market Rate it stays at that rate which resulted in some scenarios where your money could be sitting at Market Rate unmatched when in actual fact your specified rate was lower.
From 24th June, your money will simply be put on the market to be re-invested at your specified rate. Simple as that.
It is worth saying that if the highest borrower bid at the time of your re-investment is higher than your specified rate, your money will be matched at that rate.
So, we hope that you can now use the “Your Rate” functionality to better control the rate at which you re-invest. One way of looking at it is that is like a floor – you will get at least your rate, or the best borrower bid if that is higher.
Want to read more about this? Select "How RateSetter works" and it's the last item ( www.ratesetter.com/lend/faq?tsr=email&tcm=yourrate&utm_source=CRM&utm_medium=Email&utm_campaign=yourrate ).
Kind regards,
The RateSetter Team
************** If you use "Your Rate" and have a setting lower than the "Market Rate" then from the 24th June 2015 your money will be lent at "Your Rate" which could be lower unless a borrower order is higher (not often). My personal advice, rely on Market Rate or be an active lender placing money on the market at rate you want to lend at. @ westonkevRSlink.ratesetter.com/8Ls46js www.linkedin.com/profile/view?id=19236219
|
|
ikorodu
Member of DD Central
Posts: 75
Likes: 9
|
Post by ikorodu on Jun 19, 2015 14:32:56 GMT
Hmmm..
I think I preferred the old way of doing things.
I never saw my reinvestment take any more than a day or two at market rate, but liked knowing that I'd not lend at a level I considered to be not worth the risk.
I'd guess that if people do nothing this will push the rates down.
Time will tell.
|
|
oldgrumpy
Member of DD Central
Posts: 5,087
Likes: 3,233
|
Post by oldgrumpy on Jun 19, 2015 15:23:52 GMT
Today I had YR set at 6.8% but my repayments went in at 6.9% MR. I reduced it to 6.8% manually. It will probably be matched later this afternoon, and maybe being at the back of the Q at 6.9% would've got matched later in the weekend, maybe. I'll be happy with 6.8% today. By the new method, when I say 6.8% it means 6.8%. SIMPLES. Much more sensible. If people want to go with the flow let them use MR. Also SIMPLES.
|
|
DeafEater
Member of DD Central
Extremely Moderate
Posts: 218
Likes: 292
|
Post by DeafEater on Jun 19, 2015 17:18:19 GMT
Like ikorodu I definitely preferred the old method because I used it as a floor rather than the rate I wanted to be matched at. If there really is a demand for having the rate work the new way (and I'm not convinced there is), could there not be a setting that allows you to continue having it work the old way. I regret I don't have time to look at the rates every day so I'm switching to market rate for now.
|
|
oldgrumpy
Member of DD Central
Posts: 5,087
Likes: 3,233
|
Post by oldgrumpy on Jun 19, 2015 17:46:47 GMT
I'm very content with the new system. However, I don't see why the facitilty ...uh! ahem,... facility currently provided by YR could not be maintained separately under another name for lenders who opt in to it.
|
|
|
Post by mellbreak on Jun 19, 2015 19:42:37 GMT
Yes, I think this is a change for the worse. If the market rate drops below "my rate" I'm prepared to wait until it picks up again, but if it increases I want to take advantage of that. I don't see any problem in treating "my rate" as a floor, as previously. I don't have time to monitor rates every day.
If "market rate" is the rate at which deals are being done, I don't think it very likely that money would sit there for a long time unmatched. Presumably the problem is that once money is put on the market the rate at which it is offered does not change, even though the market rate drops. Would it not be possible for money on the market at "market rate" to have its rate changed daily in line with changes in the market rate?
|
|
gnasher
Member of DD Central
Posts: 207
Likes: 146
|
Post by gnasher on Jun 19, 2015 19:58:14 GMT
Well we will have to see what difference this makes to the market. I guess instead of all the daily auto reinvest going in at the same rate as it has done we will see smaller amounts spread across more rate bands. Seems like it will be more of a lottery for borrowers, with some picking up bargain chunks from sloppy lenders, and possibly encouraging more borrowers to hold out for lower rates.
But will the market be less volatile overall, reducing the opportunity for active lenders to snipe for higher rates? We will soon know.
p.s. I also prefer the old way, and would have thought that individual lenders could request the behaviour they wanted via a simple setting.
|
|
sl75
Posts: 2,092
Likes: 1,245
|
Post by sl75 on Jun 19, 2015 21:32:10 GMT
Perhaps the best compromise would be to add the option of specifying a floor rate when making a "market rate" offer.
i.e. 2 options: "your rate" - money re-offered at EXACTLY that rate, regardless of what the market rate is doing. "market rate", specifying a floor (default 0.0% if not specified) - money offered at the market rate, as at present, but not lowered beyond the user-specified floor.
Then ALL EXISTING OFFERS would become "market rate" offers with or without a floor, and only explicitly-set "your rate" offers after the change could possibly lend money out below the market rate.
|
|
|
Post by uncletone on Jun 19, 2015 21:48:36 GMT
As a public fan of "boring", dare I say it will add a little interest to handling my pensioner's coppers?
|
|
|
Post by westonkevRS on Jun 20, 2015 5:55:08 GMT
Perhaps the best compromise would be to add the option of specifying a floor rate when making a "market rate" offer. i.e. 2 options: "your rate" - money re-offered at EXACTLY that rate, regardless of what the market rate is doing. "market rate", specifying a floor (default 0.0% if not specified) - money offered at the market rate, as at present, but not lowered beyond the user-specified floor. Then ALL EXISTING OFFERS would become "market rate" offers with or without a floor, and only explicitly-set "your rate" offers after the change could possibly lend money out below the market rate. Agreed, a "Floor Rate" is the ideal scenario as described, and this is what I'll be pushing for over the longer term. I'm sure we'll get there. The issue us that the old "Your Rate" was neither that or a floor, so first step was to simplify YR to be that, FR will hopefully be next. @ westonkevRS
|
|
|
Post by p2plender on Jun 20, 2015 7:24:23 GMT
I recall an ex who always said she was too busy to check certain things on the internet daily yet never appeared unable to access her FB account....
|
|
locutus
Member of DD Central
Posts: 1,059
Likes: 1,622
|
Post by locutus on Jun 20, 2015 7:51:03 GMT
I'm confused by the mail that was sent out. It states:
So what has actually changed? Is YR still acting like a floor rate and if the market is offering higher rates, you will be matched at those higher rates rather than the rate you specified?
|
|
|
Post by yorkman on Jun 20, 2015 8:06:02 GMT
I'm confused by the mail that was sent out. It states: So what has actually changed? Is YR still acting like a floor rate and if the market is offering higher rates, you will be matched at those higher rates rather than the rate you specified? I wondered the very same. After re-reading the email and a bit of head scratching I came to the conclusion that this new change is no change at all. A late April Fool perhaps?
|
|
jonah
Member of DD Central
Posts: 2,031
Likes: 1,113
|
Post by jonah on Jun 20, 2015 8:08:19 GMT
The key word there is borrower, not lender.
so extreme example, you set a rate of 3%, but there is a borrower request at 4% and the lowest other lender offer is 4.5%... You get the 4% from the borrower, not put in at 4.5%.
at least that is how I read it.
|
|
oldgrumpy
Member of DD Central
Posts: 5,087
Likes: 3,233
|
Post by oldgrumpy on Jun 20, 2015 16:45:06 GMT
Today I had YR set at 6.8% but my repayments went in at 6.9% MR. I reduced it to 6.8% manually. It will probably be matched later this afternoon, and maybe being at the back of the Q at 6.9% would've got matched later in the weekend, maybe. I'll be happy with 6.8% today. By the new method, when I say 6.8% it means 6.8%. SIMPLES. Much more sensible. If people want to go with the flow let them use MR. Also SIMPLES. Oh look. Some of yesterday's MR 6.9% in 5 year didn't get lent out yet, and £40k of 6.8% is now available, ( my own reduced 6.8% mentioned above was matched safely!) with peanuts at 6.6%,6.5%,6.4%. Along comes a benefactor offering about £10K at 6.2% and ..... surprise, surprise, all of a sudden there appears a borrower offering 6.1%. When was he advised to do that, when the prevailing market rate is still stuck at Friday's 6.9%? Wouldn't he reallistically be advised to grab the 6.2% that nice person was offering while it was there? (And all those YR people who had their rate forced up to 6.9% may well be stranded now, which is what the new method will eliminate. In future any stranding will be at the lender specified rate, not an RS tampered one. How can that be wrong?)
|
|