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Post by Iain - Orca on Oct 13, 2016 10:15:17 GMT
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ashtondav
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Post by ashtondav on Oct 13, 2016 10:47:17 GMT
Main lesson? Ratesetter are incapable of predicting bad debt - sometimes appallingly.
I'd like to see bad debt closer to estimates before investing more. Either that or a larger provision fund to compensate for bad debt estimating inability
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jimc99
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Post by jimc99 on Oct 13, 2016 11:02:02 GMT
You are very wide of the mark in saying that there is only a 0.72% penalty applied for exiting the 5 year market early. Based on what I would be charged to exit my 3 year contracts, nearer 3.5% is a closer guess.
So your article is dangerously misleading, especially to potential investors!
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Post by Iain - Orca on Oct 13, 2016 12:03:40 GMT
You are very wide of the mark in saying that there is only a 0.72% penalty applied for exiting the 5 year market early. Based on what I would be charged to exit my 3 year contracts, nearer 3.5% is a closer guess. So your article is dangerously misleading, especially to potential investors! Hi, My intention is certainly not to mislead investors. Admittedly I have not used the sell out feature on RateSetter, however, the RateSetter site does state. 'On average, replacements are matched within 10 minutes, and the average Sell Out fee is 0.72%'Can you explain why you are experiencing a different fee than that reported by RateSetter? I'll speak to RateSetter about this as well to gain a better understanding. cheers, Iain
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wapping35
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Post by wapping35 on Oct 13, 2016 12:34:34 GMT
As per the "Statistics" thread...
I would love to know what the correct "Actual" default rate is.
For 2014 we now have 3 numbers.
Orca Money 3.55%...
RS's Provision Fund summary page 2.849%..
RS's Provision Fund Excel Download: 3.110%..
That is a huge range.
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am
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Post by am on Oct 13, 2016 12:40:17 GMT
You are very wide of the mark in saying that there is only a 0.72% penalty applied for exiting the 5 year market early. Based on what I would be charged to exit my 3 year contracts, nearer 3.5% is a closer guess. So your article is dangerously misleading, especially to potential investors! Hi, My intention is certainly not to mislead investors. Admittedly I have not used the sell out feature on RateSetter, however, the RateSetter site does state. 'On average, replacements are matched within 10 minutes, and the average Sell Out fee is 0.72%'Can you explain why you are experiencing a different fee than that reported by RateSetter? I'll speak to RateSetter about this as well to gain a better understanding. cheers, Iain The exit fee has a wide variance, and, because of the assignment fee, is unpredictable.. RS don't make it clear whether the 0.72% it is averaged over withdrawals, or over pounds withdrawn. (I suspect the former, and also that the averaging of the latter would give a larger number.) The way RS's exit fee is calculated means that it is cheaper to exit early in a loan, and to withdraw a small portion of one's funds. There are estimates that 4 years in, if reinvestments are not made, the exit fee is in the region of 10%, with a possibility of the same again or more from the assignment fee. Edit: Having read your statement on exit fees I think you ought to read the various threads here on sellout/exit fees - apart from the use of the 0.72% figure I believe that your advice to always use the 5 year market if you intend to lend for more than one year is incorrect - it is RS's stated intent that the exit fees are designed so that you're not better off investing in the longer market if you don't hold to term.
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am
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Post by am on Oct 13, 2016 14:42:16 GMT
Is this right? I would have expected to see maximum there. On the other hand the review says that the LTV across the property book is 84%.
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alender
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Post by alender on Oct 13, 2016 16:25:28 GMT
Is the sell out fee of 0.72% an average of sell outs in all the markets or is it just the 5 year market, if it is all this will could explain the low figure.
Also is this figure based on the old sell out rules or the one being used now. A discussion of this can be found on "No 3-year market - time to revise the sell-out formula?".
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jimc99
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Post by jimc99 on Oct 13, 2016 18:04:27 GMT
You are very wide of the mark in saying that there is only a 0.72% penalty applied for exiting the 5 year market early. Based on what I would be charged to exit my 3 year contracts, nearer 3.5% is a closer guess. So your article is dangerously misleading, especially to potential investors! Hi, My intention is certainly not to mislead investors. Admittedly I have not used the sell out feature on RateSetter, however, the RateSetter site does state. 'On average, replacements are matched within 10 minutes, and the average Sell Out fee is 0.72%'Can you explain why you are experiencing a different fee than that reported by RateSetter? I'll speak to RateSetter about this as well to gain a better understanding. cheers, Iain The 3.5% comes from the site when I get a quote for selling out my investment in the 3 year market. It's slightly higher for my small investment in the 5 year market. As mentioned above, there are several threads that discuss the cost of selling out the 3 and 5 year contracts. If it was just 0.72% then I would certainly buy the 5 year loans at say 5.5%, hold for 1 year and sell them. Thus earning 4.78% instead of the around 3.5% generally availible on the 1 year market. But one of the reasons for the RS sell out fees is to prevent this gaming of the rates. Edit...After you have spoken to RS please let us know what they said. Any details of their sell out calculations would be welcome.
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Post by eascogo on Oct 13, 2016 21:52:54 GMT
Hi, My intention is certainly not to mislead investors. Admittedly I have not used the sell out feature on RateSetter, however, the RateSetter site does state. 'On average, replacements are matched within 10 minutes, and the average Sell Out fee is 0.72%'Can you explain why you are experiencing a different fee than that reported by RateSetter? I'll speak to RateSetter about this as well to gain a better understanding. cheers, Iain The 3.5% comes from the site when I get a quote for selling out my investment in the 3 year market. It's slightly higher for my small investment in the 5 year market. As mentioned above, there are several threads that discuss the cost of selling out the 3 and 5 year contracts. If it was just 0.72% then I would certainly buy the 5 year loans at say 5.5%, hold for 1 year and sell them. Thus earning 4.78% instead of the around 3.5% generally availible on the 1 year market. But one of the reasons for the RS sell out fees is to prevent this gaming of the rates. Edit...After you have spoken to RS please let us know what they said. Any details of their sell out calculations would be welcome. As an investor at RS with 3-year-only money a fee corresponding to 3.1% [by RS own calculation] would be deducted if I were to sell all. My contracts total 7k+ and stretch from Nov2013 to Dec2015). If I was to compare liquidity with a number of other platforms such as MT, FS, or SS, then RS comes out last. Orcamoney citing an average fee of 0.72% in their review doesn't reflect real experience. Expressing a representative range (min/max) rather than an average would seem fairer.
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Post by brokenbiscuits on Oct 14, 2016 6:09:09 GMT
My sellout fees are 4% or there abouts. More for the lot but a little under 4% for some chunks.
Not read the terms for some time but I thought the rate you have your money out at and the rate currently available played a part in the calculation...
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locutus
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Post by locutus on Oct 14, 2016 7:10:26 GMT
My sellout fees are 4% or there abouts. More for the lot but a little under 4% for some chunks. Not read the terms for some time but I thought the rate you have your money out at and the rate currently available played a part in the calculation... I paid just over 4% to sell out last month too.
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Post by ruralres66 on Oct 14, 2016 8:07:14 GMT
I have just tested a full withdrawal on the 5 year market and it was calculated thus;
* £7600 withdrawn @ 5.5% weighted average (today, 5 year is displaying 5.5% as rate)
* Fee £72 plus £16 assignment fee.
Earliest loan was July 2015, majority though, during the time since, mainly 2016.
Most of my lending was in the now defunct 3 year, some in 1 year and "monthly" now "rolling".
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am
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Post by am on Oct 14, 2016 8:30:03 GMT
Expressing a representative range (min/max) rather than an average would seem fairer. The minimum is well defined, at 0.25%. The theoretical maximum is 100% (the assignment fee tends to 100% as current interest rates tend to infinity, but I've read here that RS won't let you sell out if the fee exceeds 100%). The practical maximum is harder to identify. Has anyone who lent at the "lend now" rate, or a freakishly low market rate, tried a quote? (Take a quote for all more recent loans, and they for all more recent loans and that loan, and use the difference in fees to calculate the differential rate.) (The reason I ask if anyone is going to be hit for assignment fees in the current environment of falling rates it's someone who lent at under the then prevailing rate.) [To sell out my 5 year loans - oldest loan 18 months old - costs about 3%. The differential rate on the oldest loan is 5.3% - which is the rate I would have been charged if I hadn't made any subsequent loans on that market.]
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jimc99
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Post by jimc99 on Oct 14, 2016 8:42:03 GMT
I have just tested a full withdrawal on the 5 year market and it was calculated thus; * £7600 withdrawn @ 5.5% weighted average (today, 5 year is displaying 5.5% as rate) * Fee £72 plus £16 assignment fee. Earliest loan was July 2015, majority though, during the time since, mainly 2016. Most of my lending was in the now defunct 3 year, some in 1 year and "monthly" now "rolling". So your saying that after say an average of 6 months holding 5 year loans paying 5.5% you could sell the lot for less than 1%. Thus earning 4.5% for the time you held the loans. Anyone else able to confirm this as if so it's obviously the way to go for everyone!
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