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Post by sduckwor on Aug 31, 2017 7:21:26 GMT
Yesterday the 5 year market was up at 7.5%. I do not understand what's happening.
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Post by WestonKevTMP on Aug 31, 2017 9:29:19 GMT
Yesterday the 5 year market was up at 7.5%. I do not understand what's happening. Processing of sell-out requests is using money on the markets to find the existing loans subject to sell-out. This on top of normal lending is using up the money on market, forcing up rates. Its basically fantastic for "Remainers", who can get higher rates subsidised by RateSetter! Kevin.
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mary
Member of DD Central
Posts: 698
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Post by mary on Aug 31, 2017 10:47:05 GMT
Yesterday the 5 year market was up at 7.5%. I do not understand what's happening. Processing of sell-out requests is using money on the markets to find the existing loans subject to sell-out. This on top of normal lending is using up the money on market, forcing up rates. Its basically fantastic for "Remainers", who can get higher rates subsidised by RateSetter! Kevin. Only if it's sustainable, which seems unlikely, as it must be very loss making!
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Post by jjtbjjtb on Aug 31, 2017 10:56:54 GMT
And the provision fund is down about 10 points to 114%.
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Post by WestonKevTMP on Aug 31, 2017 15:46:16 GMT
Only if it's sustainable, which seems unlikely, as it must be very loss making! It will be loss making when current rates are higher than the the lender rate within the loan, which will typically be around 6% as an average from last few years. However a lot of sell-outs have been done when the markets are less than this average threshold. In this (I think on average more often) scenario RateSetter are making money. So as remainder lenders, as long as we get the high rates we are the winners rather than RateSetter. But on average, not all lenders are forumites only lending at high rates, so on average I think RateSetter have done quite nicely out of the sell-outs because current lender rates have typically been lower than the last few years for loans written. Kevin.
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