agent69
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Post by agent69 on Jul 16, 2016 16:14:14 GMT
Last match in the 5 year market 5.3%, £12k lender offer at 5.5%
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Post by moneymagnet on Jul 16, 2016 18:36:12 GMT
I managed to squeak £50 (a referral fee in the rolling fund paid out early) in at 6.1% last Wednesday. Not sure what I will do if the rate goes much below 5%. I might have to open a Lloyds account and get a safe 4% on money I would have put with RS. I guess there's Zopa as well.....
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Post by brokenbiscuits on Jul 17, 2016 22:15:57 GMT
I Went through a period of pulling cash for about 6 months but left my reinvest on at 6.8% just as an unachievable number so I could pop on and manually remove funds and check out patterns and rates available.
17 June 2016 I accidentally relent some money as my 6.8% was matched.
I've started reinvesting again in july, but at 6.1%.
Have now set my relend options to 6.2% to test whether this figure is achievable.
My aim is and always has been to achieve an average return of 6% across all my investments, so I guess instead of remembering the 6.4 to 6.8% I used to get here and being annoyed... when now its just above 6%, I should be saying this is the current climate. I want 6% and I'm getting 6%+.
I'm back into topping up my ratesetter account and will carry on doing so at 6% and above.
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Post by jjtbjjtb on Jul 18, 2016 8:25:27 GMT
Ratesetter are effectively using funds from the Rolling Market (pseudo instant accesss) and feeding them into the 5 Year Market.
The list below is an excerpt from this morning's (~09:00) Lender Offers at the lower end.
I assume that it was Ratesetter's "algorithm" that placed the weekend's accurued interest of £297.6k at 5.6%.
A rational investor would have placed these funds at 5.9% or 6%.
Therefore Ratesetters algorithm is irrational.
Can this be fixed?
Rate On offer Cumulative
6.0% £202.6k £556.3k
5.9% £15.0k £353.7k
5.8% £8.6k £338.6k
5.7% £24.1k £330.0k
5.6% £297.6k £305.9k
5.5% £8,292.92 £8,292.92
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alender
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Post by alender on Jul 18, 2016 9:21:16 GMT
This has been discussed many times. OldGrumpy has accurately predicted how this works, RS will place a borrower’s offers just below the last lenders offer, this encourages investors to take this new lower rate so they are not waiting for a match and also anyone using the lend it now option will get this rate. When the borrower’s offers are taken and money is placed at the new lower rate RS will place borrower’s offers just below the new lower rate (remember the Sunday when one person crashed the rates with a few £10 offers).
Again the use of Rolling funds for longer term loans has been going on for a time and been discussed a lot, for me this is very dangerous practice. It works fine in benign times but if an event occurs that spooks P2P very little money will be placed in P2P and as money is withdrawn from the Rolling funds either at the end of the 30 days or by notice this will lead to a lock in of the Rolling funds which can be measured in years. In my option this will end RS as there will be no fees from new business and after a time no money to pay salaries etc. This is just the type of practice that Northern Rock used.
There is also the change to Market Rate which now only places funds on at the current market rate, it used to place funds at the current market rate or the highest borrower’s offers whichever was the higher.
When a time comes when this is not working, there is not enough money available and rates start to get high then RS will introduce some special offer for new money and crash the rates for a number of weeks.
Although RS will deny these are there to reduce the lending rate as RS can increase business and fees if the rates are lower otherwise why would RS be doing this. Quite a number of people on this forum think this is not deliberate and will defend these practices; it is for each of us to make up our own minds.
It should be noted that the whole RS model is not a market but what RS decides to give the lenders.
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ashtondav
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Post by ashtondav on Jul 18, 2016 9:22:56 GMT
To what cent is the rolling market instant access, then? Obviously in exceptional circumstances I can see there may be difficulty in withdrawing instantly, but surely "rolling" means "rolling". Not "feeder for the 5 year market" when demand is high and lender rates are too high.
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alender
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Post by alender on Jul 18, 2016 9:29:46 GMT
It is short term access (not quite instant) if there are funds available to buy out the loan. If there are no monies available as there is no new money coming in you will be locked in well beyond the 30 day length of the contract at you current interest rate.
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Post by propman on Jul 18, 2016 12:39:50 GMT
Ratesetter are effectively using funds from the Rolling Market (pseudo instant accesss) and feeding them into the 5 Year Market. The list below is an excerpt from this morning's (~09:00) Lender Offers at the lower end. I assume that it was Ratesetter's "algorithm" that placed the weekend's accurued interest of £297.6k at 5.6%. A rational investor would have placed these funds at 5.9% or 6%. Therefore Ratesetters algorithm is irrational.Can this be fixed? I think it is disingenuous to describe MR as an algorithm let alone irrational. This is an average of the actual matches made during a specified period of the previous day. I agree that this is not perfect and would much prefer it to be the "Chosen" rates matched so that it does not have a feedback effect, while I do not understand why late evening and morning matches are ignored. I would have thought that at most the automatic rolling matches would be excluded as frequently the excluded matches are at a higher rate, while a minimum volume would be helpful extending the period backwards at weekends when lending is light.
I agree that the "Lend it now" and generation of auto offers does appear to be set in the interests of borrowers and RS at the expense of less sophisticated lenders and that this does indirectly reduces MR.
In addition, we are assured that 5 year (and indeed 3 year) loans from rolling market are rare with most lent for 2 years or less. It would be good to know the proportion, but the disparity of the 5 year and rolling rates through a long period of excess rolling funds shows that this is not substantially being used to reduce 5 year loan rates.
Think of me as an apologist for RS if you wish, but I do not think posts like the above are likely to influence RS in any way except to make them less likely to engage.
- PM
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borofan
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Post by borofan on Jul 18, 2016 14:28:10 GMT
Is BoE future base rate cuts also having an impact on long term rates?
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Post by westonkevRS on Jul 18, 2016 18:09:33 GMT
Ratesetter are effectively using funds from the Rolling Market (pseudo instant accesss) and feeding them into the 5 Year Market. This is not true. Some monthly money is used for longer dated loans than 2 years, but it is a smallish marginal amount. This is for some unique price sensitive channels and will have limited (near zero) impact on the 5-yr market because of the small percentage points we are talking about. But that's not to say it won't change, it's all about size and trying our best to ensure liquidity for those that want to withdraw funds. Kevin.
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Post by westonkevRS on Jul 18, 2016 18:12:26 GMT
To what cent is the rolling market instant access, then? Obviously in exceptional circumstances I can see there may be difficulty in withdrawing instantly, but surely "rolling" means "rolling". Not "feeder for the 5 year market" when demand is high and lender rates are too high. Access depends on liquidity and Provision Fund stability. There is no guarantee. However for over 5 years we have met every demand and never, not once, had to hold onto a sell-out request. It's in our interest to maintain this, not least for reputational and brand reasons. Liquidity is not something taken lightly for obvious reasons. Kevin.
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Post by westonkevRS on Jul 18, 2016 18:59:23 GMT
Therefore Ratesetters algorithm is irrational.Can this be fixed? Rate On offer Cumulative 6.0% £202.6k £556.3k 5.9% £15.0k £353.7k 5.8% £8.6k £338.6k 5.7% £24.1k £330.0k 5.6% £297.6k £305.9k
5.5% £8,292.92 £8,292.92 propman is correct (as usual ). The algorithm isn't irrational, in fact it's a little OTT to call it an algorithm. It's simply an average. What could be argued as irrational are the lenders willing to lend at 5.6% on average, when with some patience they could have got 6% today. But even as your example shows, plenty of lenders and lending their money at values from 5.5% all the way up. And just because their lending strategy is different to you, doesn't mean they are irrational. I speak to many and they just want to lend it now, and anything above 5% is fine by them. I admit the position could be clouded by the "lend it now" suggestion, but it isn't that hard to investigate the site and lend at a different rate. It's money, people are careful with their hard earned cash. Kevin.
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alender
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Post by alender on Jul 18, 2016 20:54:26 GMT
Think of me as an apologist for RS if you wish, but I do not think posts like the above are likely to influence RS in any way except to make them less likely to engage. I do not believe if you give an opinion you should be thought of an apologist for RS. However Kevin has engaged on a number of these posts which is a good thing. Difficult to know what effects these type of posts have on RS but they did change the PF lending back to RS borrowers, thought this is probably because it went into the main stream press but only because it started life on this Forum. Also it may have no effect RS however but it does inform investors who can be bothered to do some research the way RS works and information is always useful when making investment decisions.
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Post by jjtbjjtb on Jul 18, 2016 21:26:20 GMT
Rate On offer Cumulative
6.0% £202.6k £556.3k
5.9% £15.0k £353.7k
5.8% £8.6k £338.6k
5.7% £24.1k £330.0k
5.6% £297.6k £305.9k
5.5% £8,292.92 £8,292.92
Who are the lenders willing to accept 5.6% when they could easily have obtained circa 5.9 or 6%?
Why is there about twelve times more money coming onto the market at 5.6% than at 5.7%?
I presume that the whole £297k is NOT coming from a single (irrational?) lender.
Is this £297k actually from weekend rolling market money (around 3% return) being invested in 5 year market at only 5.6%. If that is the case then Ratesetter has made the decision to place the money at that low rate instead of a more rational 5.9 or 6%.
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alender
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Post by alender on Jul 18, 2016 22:15:27 GMT
The 5.6% is the market rate for today so all lenders with MR set for reinvestments will have the repayments placed at this rate as well as new lenders who chose the MR rate option. If you click on “View Full Market” you can see the number of lenders at each interest rate.
As far as I known the rolling money used for longer term loans does not appear on any Market except the Rolling market, how much and where it goes is not known except that it is used for longer term loans and these are funded by a new loan every 30 days after repayment of the current loan.
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