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Post by newlender on Feb 20, 2017 11:41:16 GMT
I've been looking at the lender offers in the various markets. Usually I just look to see the borrower and lender offers at the rate I have in mind, but today I scrolled to the top of the 5yr list just out of interest. There's over half a million offered at rates between 6% and 20%(!), a lot of it at quite high rates of 7+ or 8+ %. As I am now happy to take between 5.5% and 6%, as are most forumites, I think, I just wonder why people would leave their money at a rate that stands no chance of a match.
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oik
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Post by oik on Feb 20, 2017 12:26:59 GMT
My best guess would be it's an alternative to having money in holding for a short period, perhaps with an optimistic hope for a fluke spike to hoover it up. Yep, that really is my best guess, other than that...
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littonowl
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Post by littonowl on Feb 20, 2017 13:09:51 GMT
...anomalies do occur though, even on the rolling market there was at least one day this month where it spiked up to 7.5%, but I agree it's odd waiting on the hope that such a day comes along, and that you also get filled.
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sl75
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Post by sl75 on Feb 20, 2017 13:21:30 GMT
In the past, rates around 7%-8% have been readily available. Some of the money may simply be lenders who set an offer years ago with automatic re-investment at rates that had been readily achievable at that time. (Check out the RateTrends section of "RateSetter Info" on the main site, and bear in mind that daily spikes somewhat above the averages shown would have been achievable). Given the "set and forget" nature of the investment, some accounts may quite literally have been forgotten! For others, as oik suggests, it may simply be a way of collecting cash until there's enough to be worth bothering to withdraw (and if a rate spike allows re-investment at an acceptable rate, all the better). I'd note that the one-off withdrawal function automatically cancels sufficient offers to release the amount of cash requested, so it's no extra work for the lender once the automatic re-investment has been set up once.
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Post by newlender on Feb 20, 2017 13:39:43 GMT
Does Ratesetter benefit in any way from all that stagnant cash?
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sl75
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Post by sl75 on Feb 21, 2017 10:39:55 GMT
Does Ratesetter benefit in any way from all that stagnant cash? Sure - it means that they can better manage cash flow, because there's a significant reserve available to match to borrower requests if the funds available at "current market rate" dry up. The extra business they're able to generate as a result increases their turnover and thus revenue (and hopefully profit!). Because lender money is ringfenced in a client account, they won't have any direct financial benefit from money just sitting there. The bank that holds the client account gets that benefit.
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jonno
Member of DD Central
nil satis nisi optimum
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Post by jonno on Feb 21, 2017 11:02:01 GMT
I've been looking at the lender offers in the various markets. Usually I just look to see the borrower and lender offers at the rate I have in mind, but today I scrolled to the top of the 5yr list just out of interest. There's over half a million offered at rates between 6% and 20%(!), a lot of it at quite high rates of 7+ or 8+ %. As I am now happy to take between 5.5% and 6%, as are most forumites, I think, I just wonder why people would leave their money at a rate that stands no chance of a match. If it's any consolation, I asked precisely the same question over two years ago, and to be honest I'm still none the wiser (other than the thoughts of our esteemed colleagues above)
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