Zopa boosts target interest rates across all products
ZOPA has boosted its lender returns in response to the recent Bank of England interest rate rise.
The peer-to-peer lender is now offering target returns of 4.5 per cent on its Core product and 5.2 per cent for its Plus account, both of which can be held in an Innovative Finance ISA (IFISA) wrapper.
Target returns were previously four per cent and 4.6 per cent respectively.
The platform said the higher target returns reflect pricing improvements in the loans market, and the Bank of England’s recent base rate rise.
However, it is so far unclear if this means Zopa borrowers will be paying more and how much they will see rates increase by.
The Zopa website currently still displays the same typical annual percentage rate of 3.2 per cent for a £10,000 loan.
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Investors will still be lending to the same low-risk borrowers, Zopa said.
“We’re delighted to offer investors a return of up to 5.2 per cent for accepting the risk of P2P lending,” Andrew Lawson (pictured), chief product officer at Zopa, said.
“As demand for cash ISAs drops to an 18 year low, the IFISA stands as an excellent middle ground for people who are looking for an alternative to the cash ISA but don’t want to take on the risks or volatility associated with investing in the stock market.”
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