What is a Target Rate? or What rate do I actually get?
The Target Rate that we publish from time to time is the average across the range of interest rates we will target on new loans. Target rates apply for all of our Products other than the Professional Investor who select their own loans.
Depending on the amount you invest you could receive a higher rate.
Higher risk loans tend to achieve higher rates.
We lend on conservative loans across different risk bands. We assess each loan individually and use a weighted risk matrix that combines decades of property and lending experience, detailed due diligence and realistic valuations to categorise risk.
Unless you are a Professional Investor, your loans are automatically selected for you. By doing things this way, you do not constantly have to monitor your account to select loans. We lend across a fairly narrow range of Risk Bands at the conservative end of the bridging and development loan market. We do not allow investors to specify their lending preferences within these Risk Bands, as it is important for us to have the flexibility to match lenders and borrowers in order to give certainty to borrowers and make your money work harder by reducing Cash Drag.
Good to know
The Target Rate is the average rate you should receive on your loans assuming their composition and performance continue as expected. This rate assumes your money is invested 100% of the time and does not take into account Defaults or Cash Drag ie. the time your money is in the investment queue and not invested. You can see the effect of Defaults, Cash Drag and Compound Interest on this rate by looking at the Actual Rate.
As part of our compliance with industry regulators we produce an ‘Outcomes Statement’ which summarises how our loan book has performed each year. You can see this on our statistics page.