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Post by mellbreak on Jan 11, 2016 19:26:54 GMT
Can someone explain how matching occurs when the highest "borrower offer" rate is lower than the lowest "lender offer" rate? As lenders, we can drop our rate to match the borrower, but can borrowers just as easily increase the rate they offer to match what lenders as asking for? Are we dependent on their doing this for a match to be achived? Can they leave their borrowing offer on the table until the lending rate drops, or do Ratesetter take an active part in negotiating a match? I can see an impasse occurring, like the greengrocer at the end of the day who is reluctant to drop his prices but needs to clear his stock, and the shoppers who delay buying until he does so.  |
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oldgrumpy
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Post by oldgrumpy on Jan 11, 2016 19:52:53 GMT
Can someone explain how matching occurs when the highest "borrower offer" rate is lower than the lowest "lender offer" rate? As lenders, we can drop our rate to match the borrower, but can borrowers just as easily increase the rate they offer to match what lenders as asking for? Are we dependent on their doing this for a match to be achived? Can they leave their borrowing offer on the table until the lending rate drops, or do Ratesetter take an active part in negotiating a match? I can see an impasse occurring, like the greengrocer at the end of the day who is reluctant to drop his prices but needs to clear his stock, and the shoppers who delay buying until he does so. Borrower rate is engineered by RS, not the borrowers, and nearly always appears first each day at 0.1 or 0.2% below the best (genuine because it's real committed money) lender offer. By that means, RS are able to lower the " rate to lend right now" figure shown on the main lending page (click one of the terms under "lend money" on the left) as soon as the day's "Market Rate" has been set. For quite a long while a lot of matching does then happen while visible lenders' money is almost untouched. Eventually, later in the day, matching starts to happen from the lender offers, from the bottom upwards. How high you set your own rate depends how many days you are willing to wait, but generally better rates are available on Wednesday and Thursday, sometimes through to Friday each week, (but not if it's the first day of a month). RS always have a waiting list of borrowers to match to existing lender offers, but rarely flag them up because that wouldn't help rates fall to make RS more competitive to borrowers. I find that if I can be about £200K-250K in the queue during a midweek morning, I often get matched by the evening, but nothing is guaranteed. I have always avoided Market Rate, and can always do a bit better (often up to 0.6% better) and NEVER do "lend right now" rate, which often ends up 1.5% or more lower than need be. Unfortunately all that means I have to monitor the site at leat twice a day, but that's OK because I'm usually online to a photographic image site, submitting archive pictures destined for the British Library. Just occasionally a large borrower requirement suddenly appears way above the "going rate" which lenders are actually offering. Then there is bedlam while matching occurs at higher rates while lower offers by the lenders are ignored and bypassed. Whatever you choose to set as your rates (the site does warn you that you can be stranded with unlendable money when rates fall), RS make it very easy to alter each order's rate settings separately if you start out too "optimistically"
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adrianc
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Post by adrianc on Jan 11, 2016 20:06:55 GMT
Can someone explain how matching occurs when the highest "borrower offer" rate is lower than the lowest "lender offer" rate? At the very simplest... One borrower says "I won't pay more than 6%". One lender says "I won't lend at less than 6.5%". Look at the list, and there's demand on both sides. Then another lender comes along, and says "Would somebody like my money?" (Maybe he says "Market Rate, please", maybe he manually says "Ooh, 6%! Wow! Better than the bank...") Bingo. Match.
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Post by mellbreak on Jan 11, 2016 21:03:22 GMT
Can someone explain how matching occurs when the highest "borrower offer" rate is lower than the lowest "lender offer" rate? As lenders, we can drop our rate to match the borrower, but can borrowers just as easily increase the rate they offer to match what lenders as asking for? Are we dependent on their doing this for a match to be achived? Can they leave their borrowing offer on the table until the lending rate drops, or do Ratesetter take an active part in negotiating a match? I can see an impasse occurring, like the greengrocer at the end of the day who is reluctant to drop his prices but needs to clear his stock, and the shoppers who delay buying until he does so. Borrower rate is engineered by RS, not the borrowers, and nearly always appears first each day at 0.1 or 0.2% below the best (genuine because it's real committed money) lender offer. By that means, RS are able to lower the " rate to lend right now" figure shown on the main lending page (click one of the terms under "lend money" on the left) as soon as the day's "Market Rate" has been set. For quite a long while a lot of matching does then happen while visible lenders' money is almost untouched. Eventually, later in the day, matching starts to happen from the lender offers, from the bottom upwards. How high you set your own rate depends how many days you are willing to wait, but generally better rates are available on Wednesday and Thursday, sometimes through to Friday each week, (but not if it's the first day of a month). RS always have a waiting list of borrowers to match to existing lender offers, but rarely flag them up because that wouldn't help rates fall to make RS more competitive to borrowers. Just occasionally a large borrower requirement suddenly appears way above the "going rate" which lenders are actually offering. Then there is bedlam while matching occurs at higher rates while lower offers by the lenders are ignored and bypassed. I take it then that if I have £5k on offer at 6.2% and the best borrower offer is for £5k at 6%, they will never match each other and I will never see the offers that do match, as neither of them will appear on the "market view". The borrower has to wait until someone else offers to lend £5k at 6%, and I have to wait until RS find another borrower to whom the best they can offer is my 6.2%.
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Post by westonkevRS on Jan 11, 2016 21:45:08 GMT
I take it then that if I have £5k on offer at 6.2% and the best borrower offer is for £5k at 6%, they will never match each other and I will never see the offers that do match, as neither of them will appear on the "market view". The borrower has to wait until someone else offers to lend £5k at 6%, and I have to wait until RS find another borrower to whom the best they can offer is my 6.2%. Not quite true no. This is true in the scenario outlined by oldgrumpy where a majority of the offers on the markets are " engineered", in that RateSetter show all offers to give a full picture of the market. They are all actual borrower offers (i.e. engineer doesn't mean made-up) but in reality have already been matched. However sometimes a borrower actually does make a lower offer and is waiting for a lender to reduce his rate, as you indicate. In this instance if you lower your rate you will be matched specifically to that borrower. Kevin.
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Post by mellbreak on Jan 11, 2016 22:29:13 GMT
I take it then that if I have £5k on offer at 6.2% and the best borrower offer is for £5k at 6%, they will never match each other and I will never see the offers that do match, as neither of them will appear on the "market view". The borrower has to wait until someone else offers to lend £5k at 6%, and I have to wait until RS find another borrower to whom the best they can offer is my 6.2%. Not quite true no. This is true in the scenario outlined by oldgrumpy where a majority of the offers on the markets are " engineered", in that RateSetter show all offers to give a full picture of the market. They are all actual borrower offers (i.e. engineer doesn't mean made-up) but in reality have already been matched. However sometimes a borrower actually does make a lower offer and is waiting for a lender to reduce his rate, as you indicate. In this instance if you lower your rate you will be matched specifically to that borrower. Kevin. Right, so I can reduce my rate to match a borrower offer, but the borrower cannot increase his rate to match a lender offer. If I don't reduce mine, I have to wait for another borrower to come along and hope that no other invisible lender undercuts me.
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oldgrumpy
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Post by oldgrumpy on Jan 11, 2016 23:51:02 GMT
I take it then that if I have £5k on offer at 6.2% and the best borrower offer is for £5k at 6%, they will never match each other and I will never see the offers that do match, as neither of them will appear on the "market view". The borrower has to wait until someone else offers to lend £5k at 6%, and I have to wait until RS find another borrower to whom the best they can offer is my 6.2%.
Yes, and in that scenario RS may well find a borrower for your money surprisingly soon, especially if very few real lenders (or RS's new Market Rate for the next day) undercut you.
I was cheeky today and held out for 6.3%, and got down to about £120K in the Q (some of the 6.2% has been matched) so I have high hopes for tomorrow. Monday isn't the best day for lenders 
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Post by westonkevRS on Jan 12, 2016 7:02:19 GMT
Right, so I can reduce my rate to match a borrower offer, but the borrower cannot increase his rate to match a lender offer..... Letting a borrower increase his APR to get the loan could be a sign of desperation. Despite obviously being bad risk management would have all sorts regulatory issues linked to responsible lending.... (shame though, sounds an interesting business case - " choose your own APR, go as high as you want until you get approved!) @ westonkevRS
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sl75
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Post by sl75 on Jan 12, 2016 8:12:27 GMT
Right, so I can reduce my rate to match a borrower offer, but the borrower cannot increase his rate to match a lender offer..... Letting a borrower increase his APR to get the loan could be a sign of desperation. Despite obviously being bad risk management would have all sorts regulatory issues linked to responsible lending.... (shame though, sounds an interesting business case - " choose your own APR, go as high as you want until you get approved!) @ westonkevRS Surely it wouldn't be "increasing his APR", but merely allowing the APR to revert to the rate that RateSetter should have quoted as "the rate to borrow right now" based on the lowest lender offer (to mirror the "rate to lend right now" based on the highest borrower request)?
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oldgrumpy
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Post by oldgrumpy on Jan 12, 2016 14:22:21 GMT
I take it then that if I have £5k on offer at 6.2% and the best borrower offer is for £5k at 6%, they will never match each other and I will never see the offers that do match, as neither of them will appear on the "market view". The borrower has to wait until someone else offers to lend £5k at 6%, and I have to wait until RS find another borrower to whom the best they can offer is my 6.2%.
Yes, and in that scenario RS may well find a borrower for your money surprisingly soon, especially if very few real lenders (or RS's new Market Rate for the next day) undercut you.
I was cheeky today and held out for 6.3%, and got down to about £120K in the Q (some of the 6.2% has been matched) so I have high hopes for tomorrow. Monday isn't the best day for lenders
Success  Matched c14:00 today at 6.3% while (Market Rate was set at 5.6%* and "lend right now" has been around 5.5% most of the morning). 6.4/6.5% possible tomorrow/Thursday? * I think. The Ratetrends chart/table has yet to be mended and I can't isolate today any more.
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Investor
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Post by Investor on Jan 12, 2016 15:31:04 GMT
I take it then that if I have £5k on offer at 6.2% and the best borrower offer is for £5k at 6%, they will never match each other and I will never see the offers that do match, as neither of them will appear on the "market view". The borrower has to wait until someone else offers to lend £5k at 6%, and I have to wait until RS find another borrower to whom the best they can offer is my 6.2%.
Yes, and in that scenario RS may well find a borrower for your money surprisingly soon, especially if very few real lenders (or RS's new Market Rate for the next day) undercut you.
I was cheeky today and held out for 6.3%, and got down to about £120K in the Q (some of the 6.2% has been matched) so I have high hopes for tomorrow. Monday isn't the best day for lenders
Success Matched c14:00 today at 6.3% while (Market Rate was set at 5.6%* and "lend right now" has been around 5.5% most of the morning). 6.4/6.5% possible tomorrow/Thursday? * I think. The Ratetrends chart/table has yet to be mended and I can't isolate today any more. Quite correct it was 5.6%. All you need to isolate today's rate is (a) Chrome (b) Zoomed to 200% and (c) a very steady hand. Hopefully RS IT might get this sorted as they have known about this long enough. If it carries on any longer we will be into 2017. edit: to save anyone the trouble today's MR across all lending is: Monthly 3.1, 1 yr 3.9, 3 yr 4.1 and 5 yr 5.6
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oldgrumpy
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Post by oldgrumpy on Jan 12, 2016 15:39:54 GMT
Investor Thank you. I was too idle to do the magnify process in Firefox.
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locutus
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Post by locutus on Jan 12, 2016 16:08:59 GMT
Can anyone explain why the 1 year rate is 4.5% but the 3 year rate is 4%. To me, this normally indicates that a market is not functioning properly.
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Post by yorkman on Jan 12, 2016 16:52:26 GMT
Can anyone explain why the 1 year rate is 4.5% but the 3 year rate is 4%. To me, this normally indicates that a market is not functioning properly. Simple answer...it's not.
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locutus
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Post by locutus on Jan 12, 2016 16:59:31 GMT
Can anyone explain why the 1 year rate is 4.5% but the 3 year rate is 4%. To me, this normally indicates that a market is not functioning properly. Simple answer...it's not. Precisely. I like RS but wish they would sort out their transparency issues. In a properly functioning market, this would not happen.
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Matched c14:00 today at 6.3% while (Market Rate was set at 5.6%* and "lend right now" has been around 5.5% most of the morning).
