aju
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Post by aju on Aug 6, 2018 15:05:56 GMT
Bank base Interest Rate has risen today by quarter of 1% to 0.75%. (about time too if you ask me this was about 2 years too late but what do I know) Just curious how this affects picking up sold loans if the rate rise is factored in as rates change. Does this mean that someone who sells a loan that I then pick will be selling a loan that could effectively be lower than the rates on offer when it is sold. I'm probably not explaining it very well but as rates rise and fall does this not have an effect on the selling of loans (1% fee + adjustments) and buying loans that were sold that way. Also will be interesting to see if Zopa rates rise on the back of this too. I suspect it's irrelevant if the wider market doesn't respond. I always thought that its been a long time since commercial IR's lost their connection to the bank rate a long time ago. I believe that the seller takes a hit so that you, the buyer, get the current % rate. This is what I take the wording to mean when I sell loans, that I may get back less owing to interest rate rise. I did wonder that was the case the only thing that bothered me was that from a perspective of me, a lender, suddenly wanting to get out of zopa and the IR rocketing up quite a bit as it did in the 80's say then it would probably mean that I'd take quite a hit above the 1% to get out using the current RR terms. Of course that's looking at things from a perspective of today's rates I have loans in trying to sell at tomorrow's assumed increased rates. I'm guessing then that for a given 5 year loan I have had for say 3 years and I need to bail for want of a better term with an interest rate on my loan at say 3% and the rate has shot up by say 2% since then I would take quite a hit on that and I'm not sure I would know this at the outset of selling. Unless Zopa can predict what my costs might actually be before I hit the GO button and presents them to me. I think not!. Thanks for the confirmation though, just need to hope that I don't need to get my hands on money quickly. should be ok in my case though at the moment, but Mrs Aju is on a mission these days 
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zlb
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Post by zlb on Aug 6, 2018 22:25:51 GMT
I believe that the seller takes a hit so that you, the buyer, get the current % rate. This is what I take the wording to mean when I sell loans, that I may get back less owing to interest rate rise. I did wonder that was the case the only thing that bothered me was that from a perspective of me, a lender, suddenly wanting to get out of zopa and the IR rocketing up quite a bit as it did in the 80's say then it would probably mean that I'd take quite a hit above the 1% to get out using the current RR terms. Of course that's looking at things from a perspective of today's rates I have loans in trying to sell at tomorrow's assumed increased rates. I'm guessing then that for a given 5 year loan I have had for say 3 years and I need to bail for want of a better term with an interest rate on my loan at say 3% and the rate has shot up by say 2% since then I would take quite a hit on that and I'm not sure I would know this at the outset of selling. Unless Zopa can predict what my costs might actually be before I hit the GO button and presents them to me. I think not!. Thanks for the confirmation though, just need to hope that I don't need to get my hands on money quickly. should be ok in my case though at the moment, but Mrs Aju is on a mission these days I'd always check that understanding with them (although I'd only expect a clear answer after at least three clearly stated email questions) However, that's the warning message I always see when I switch on selling for the free to sell account type, and get reminded that it's not actually cost free in total.
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