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Post by Deleted on Oct 5, 2019 8:20:38 GMT
Agreed, three queues into the same market, but how does RS allocate their loans to the three queues? Will they match and deplete all the lender offers sitting in Access, all the way up to 3.9%, before those waiting at 3.9% in Plus even get a look in? Then ditto depleting Plus until Max starts getting serviced at 4.9%? This maximises profit for RS, assuming the borrower's rate is set irrespective of the queue (and I think we have to make that assumption). In the previous scheme, the term of the loan would determine the market (Rolling, 1yr or 5 yr) meaning those waiting at the foot of the 1yr or 5yr queue would be more readily serviced surely? I can't help feeling this change is not to the benefit of investors, but to RS. Without proper explanation by RS it's all conjecture, and the lack of clarity leaves me suspicious. Lenders deserve better than this. I did try researching Plus and Max and it's surprisingly difficult to find anything substantive. I think that when money is lent from Access, it affects all 3 queues, as they're really one queue. For example, with small numbers for ease: Queue before Access 50k, Plus 50k, Max 50k (total 150k) 30k loan goes through from Access, but this affects all 3 as it's one queue really, so new queue is: Access 40k, Plus 40k, Max 40k (total 120k) You can see that the 3 queues have identical offers in. That's because it's one queue split 3 ways as that's the way they've chosen to show it. Instead they could have shown one queue (Access) and say you'll get an extra 1% or 2% if you commit to the 30d or 90d exit penalties.
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Stonk
Stonking
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Post by Stonk on Oct 5, 2019 9:21:48 GMT
Think of it like this.
There is a single combined queue for Acces, Plus and Max.
When a lender order is created on any of those products, that fixes its place in the queue. The order "knows" which product it applies to.
When RS displays a view of the queue from the perspective of a particular product, then for the purpose of showing that view they adjust the rates at which they display orders on the other products. For example, consider an order at 5.2% on Max. If you view the queue from the perspective of the Max product, the order shows at 5.2%. But if you are looking at the Access product, then that order is shown at 3.2%. Presumably the offset is calculated by taking the difference between the Going Rates.
This ensures the queues work without queue-jumping. Orders at 5.2% on Max will match interleaved with orders at 3.2% on Access and 4.2% on Plus, according to when they were placed.
Note that RS is equally happy to lend on whichever product's order is at the front of the queue. If it is an Max order and lends at 5.2%, it's tempting to think they could have lent the same money at 3.2% to an Access order, but of course a loan on Max carries a probable release penalty and therefore a longer commitment from the lender.
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Post by bernythedolt on Oct 5, 2019 10:22:56 GMT
Ah, that makes better sense than my conjecture. Thank you Stonk and especially inv11 - your worked example was particularly helpful.
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Post by bernythedolt on Oct 5, 2019 11:01:22 GMT
Instead they could have shown one queue (Access) and say you'll get an extra 1% or 2% if you commit to the 30d or 90d exit penalties. So much clarity conveyed by that single sentence, it's a pity the explanation from RS wasn't as clear and left many of us bewildered. Instead they said Plus was replacing the 1yr product and Max replacing 5yr, which just leads to confusion. In truth there's very little similarity between Plus and 1yr, or Max and 5yr. They're both really Access with a bonus and penalty tagged on.
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69m
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Post by 69m on Oct 5, 2019 12:30:23 GMT
As suspected, it seems that the old products are already being completely throttled.
In the 1 Year market, lender offers are currently £3.1M against £0 borrower offers. For the 5 Year market, the equivalent figures are £7.1M and just £29,148.
I think that RS needs to be honest and tell lenders in those queues that their money is unlikely to ever get matched.
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Post by Deleted on Oct 5, 2019 21:17:43 GMT
As suspected, it seems that the old products are already being completely throttled.
In the 1 Year market, lender offers are currently £3.1M against £0 borrower offers. For the 5 Year market, the equivalent figures are £7.1M and just £29,148.
I think that RS needs to be honest and tell lenders in those queues that their money is unlikely to ever get matched.
The 1 year market is always really quiet at the weekend. It looks to me like you could get 5.4% on the 5 year market fairly easily. Looks a lot better than the 4.9% in Max, but both rates are too low in my opinion but every investor will have their own attitude to risk/reward.
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Post by bernythedolt on Oct 5, 2019 21:45:16 GMT
It looks to me like you could get 5.4% on the 5 year market fairly easily. I can confirm this. Last night I decided to protect my 1yr and 5yr markets from becoming defunct - the new default position just introduced by Ratesetter if you don't keep them active - by dropping in the odd £10 here and there. One of my £10 lend orders matched at 5.4% on the 5yr market overnight.
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Post by Badly Drawn Stickman on Oct 5, 2019 22:18:55 GMT
It looks to me like you could get 5.4% on the 5 year market fairly easily. I can confirm this. Last night I decided to protect my 1yr and 5yr markets from becoming defunct - the new default position just introduced by Ratesetter if you don't keep them active - by dropping in the odd £10 here and there. One of my £10 lend orders matched at 5.4% on the 5yr market overnight. There is around £3000 available at the time of writing. I must admit its not very tempting. I usually like to give changes a while to see how they evolve, but I have a strong suspicion that the days of 'acceptable' rates might be a while returning. Those suggesting that the target market is passive investors 'happy with less' probably have it right. It was fun while it lasted and I still have some decent investments, but do wonder how long it will be before they are repaid early.
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Post by Deleted on Oct 6, 2019 8:20:56 GMT
Market rate in the 5 year market has now dropped to 5.4%.
Looks like the £3m chunk at 5.5% has just moved down to 5.4% so best rate easily available is now 5.3%.
Expect this trend will continue until Market Rate = Going Rate.
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aju
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Post by aju on Oct 6, 2019 11:28:52 GMT
Okay so I've loaded up all 5 queues and it appears to me that the following maybe a good assumption
Access 3.0% 3.9M Plus 4.0% 3.9M Max 5.0% 3.9M 1Y Not sure yet how to gauge this one position wise 5Y 5.4% 3.2M (Note 3.9M is pointing at 5.6%)
I've set my 5Y @ 5.6% to see what happens over the next day or so but for me if the whole queue gets sucked up over the next day or so I might get a lookin.
However, looking at the last few weeks or so the average for a week is approx 2.21M per day. Not sure of the spreads over the weekends though so certain days may be more valuable in lend terms than other I am also assuming that these are the weekends and the monday relend drag (for want of a better term).
One strange thing is that the legacy 1Y/5Y queues seem to spend less time with borrower offers appearing so I'm guessing the legacy queues get a worse bite of the cherry perhaps, however, this may just be down to the incidence of less offers in the old queue as the likes of us opportunists keep moving things around to get bites. Might also be an effect of the new rate change being subject to incorrect use and re-offering unchanged rates in error due to old understanding of the EDIT button. Mind you that is a bit of an outside chance I think.
In the absence of little other experience has anyone else got any thoughts on gaming plans, I know its early but I thought It might be useful to compare ideas and notes etc.
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Post by bernythedolt on Oct 6, 2019 11:44:06 GMT
I'm afraid my game plan was to trim down and head for a safer haven!
At the low and non-fluctuating rate now being set, for me the risks are no longer justified.
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aju
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Post by aju on Oct 6, 2019 11:58:37 GMT
I'm afraid my game plan was to trim down and head for a safer haven! At the low and non-fluctuating rate now being set, for me the risks are no longer justified. Don't get me wrong I've been contemplating that myself our overall Xirr for RS over the last 11 months suggest I have been getting 4.8%, despite actually getting rates as high as 6.0% which is a tad odd but getting the higher rates does entail waiting longer than full relends I guess so its probably not that far off the mark. We are waiting to pick up the bonus next month and see where things are then. At present if we were to bail out at least most of it would be on the old regime 1.5% at worst, although to be fair I would probably just turn off the relend (set rates way higher than I could expect and just move to holding and out. Even if all was dumped at 1.5% it would still mean I am beating 3% which as I've stated many times is better than I would get elsewhere (except for 5% at NW I guess although that horse bolted a few years ago for us sadly). If I pulled out my first point of call would be Marcus - at least we grabbed the better rates before they reduced it slightly but as I am taxed Mrs aju will hit the fscs buffer very quickly if we did that.
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Post by erniec on Oct 6, 2019 11:59:53 GMT
I am exclusively in the 1 year market and will be saying goodbye when that product is no longer available to me.
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Post by jono75 on Oct 6, 2019 14:25:55 GMT
I am exclusively in the 1 year market and will be saying goodbye when that product is no longer available to me. I think it's practically dead now already. No borrower offers for a while, I've had some cash on the market over a week now at 5% They might as well stop new investments in it.
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jlend
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Post by jlend on Oct 6, 2019 15:18:04 GMT
I am expecting the 5yr market to fairly quickly drop to exactly the same rates as the going rate on the Max market, so 5 percent.
I am expected the Max market to rarely go above 5 percent.
This should at least mean there is plenty of money going into the PF. It should also mean the stability of the RS platform will improve and RS are able to operate going forward without too many more large injections of equity to fund future growth. I expect plaform risk will reduce.
I would love to see 6 percent rates on the 5 year market again but I think that is unlikely bar very rare peaks to fund very large loans or when large lenders exit the market.
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