STEP 01
This makes NAR more informative than a flat average of the interest rates across an investor’s portfolio, because a simple average would assume that money has been invested for the same amount of time in each loan.
Net Annual Return (NAR)
See how Hive5 calculates Net Annual Return (NAR) using XIRR, and why your actual NAR can differ from the advertised interest rate on individual P2P loans.
What is NAR?
Net Annual Return (NAR) is the actual annualised rate of return an investor has earned across all their investments since they started on Hive5. It is calculated using XIRR (extended internal rate of return), which accounts for the exact amount and date of every cash flow, including periods when cash wasn’t invested.
Rather than being a simple average of loan interest rates, NAR reflects the details of every cash movement since the investor’s portfolio began, which makes it a more accurate measure of P2P lending returns.
How NAR is calculated
Hive5 calculates each investor’s Net Annual Return using the XIRR (extended internal rate of return) method. This means the result is based on the exact amounts and dates of every cash flow in the account.
STEP 02
In practice, investors typically make deposits, withdraw funds, and reinvest earned interest on different dates throughout the year. In plain terms, XIRR works out the single annual rate of return that matches your actual results, given when each amount went in and came out.
STEP 03
It considers when each deposit arrives, how long the cash is invested, and at what rate, as well as any periods when money isn’t earning interest. Understanding how to calculate investment return in this way helps you stay informed about how your portfolio is performing.
Why NAR is usually different from the advertised rate
When looking at your Hive5 investments, you may notice that your NAR differs from the stated interest rates on individual loans. This is expected, because NAR reflects how a real portfolio performs over time rather than the rate on a single loan.
NAR measures the performance of the whole portfolio, and three main factors can cause it to differ from the advertised rate:
Uninvested cash between reinvestments
When money is sitting in an account and not earning interest, this is known as cash drag. It occurs when new funds are added but aren’t immediately invested, or when a loan is repaid and the returned principal and interest aren’t put into a new loan right away.
Using Auto Invest can reduce cash drag. However, there may still be a delay before funds are invested automatically, while the system looks for available loans that match the criteria you have set. This means that even when using Auto Invest, uninvested cash can lower your NAR.
The actual timing of repayments
The interest rates advertised for loans are based on standard schedules, which assume that interest and principal are paid on time. In practice, loans don’t always work like this: a borrower might repay early or make a payment late.
If capital is returned early, you get it back sooner, but it stops earning interest until it’s reinvested. Repayment delays can cause your NAR to dip temporarily. Interest keeps accruing throughout the overdue period, and if a payment is delayed by more than 60 calendar days, the Buyback Obligation requires the Loan Originator to repurchase the claim rights plus accrued interest. This depends on the Loan Originator’s ability to perform.
The mix of loans and terms actually held
Many investors choose to diversify their portfolio by investing in loans with different risk profiles, loan terms, and interest rates.
Because NAR is calculated across the full mix of the portfolio, it won’t simply reflect the highest-paying loan. Instead, it gives a realistic view of how the combination of loans is contributing to your returns.
A real example
Hive5 investor Andreas has invested with Auto Invest since 2023. According to his published investor story, his personal NAR reached 13.04%, below the 14.4% headline average nominal rate. Uninvested cash and repayment timing can explain the gap.
RateAnnual rate
Andreas’s personal NAR
Since 2023, using Auto Invest
13.04%
Headline average nominal rate
Hive5 homepage, as of 14 Sept 2026
14.4%
Interest is calculated daily on the principal active in each loan, so NAR reflects actual earnings, not a simple average. See the full formula on our How it Works page. Every investor’s NAR is different. Past performance is not a reliable indicator of future results; capital is at risk and returns are not guaranteed.
How the Buyback Obligation affects your return
Eligible loans on Hive5 may include a Buyback Obligation. If a borrower’s repayment is delayed by more than 60 calendar days, the Loan Originator is contractually required to repurchase the claim rights plus accrued interest. The process is automatic, so no action is needed from you, and interest keeps accruing throughout the overdue period.
Historically, many borrowers have repaid before the 60-day mark is reached, but past performance is not a reliable indicator of future results. The Buyback Obligation is an obligation of the relevant Loan Originator and depends on its ability to perform, so it does not remove the risk of loss.
Rewards that can add to your return
Investor incentives can add to the return earned from standard interest rates. The Hive5 Loyalty Program becomes available once an investor has been on the platform for at least 90 days and has a portfolio of €5,000 or more.
Hive5 may also offer new investors a welcome cashback on their early investments. Check the Help Center article on promotions for current terms and conditions.
There are five tiers, based on portfolio size:
- +0.5%Navigator€5k–10k
- +0.75%Voyager€10k–25k
- +1%Pioneer€25k–50k
- +1.25%Premier€50k–100k
- +1.5%Elite€100k+
Frequently asked questions
Now that you know how Net Annual Return is calculated, you can check the figure for your own portfolio. After logging in to Hive5, you’ll find your NAR in your account, where it reflects all the factors covered on this page.
Net Annual Return (NAR) shows the annualised return generated by your investment portfolio. Hive5 calculates NAR using XIRR (extended internal rate of return), taking into account the exact amounts and dates of all cash flows.
The interest rate shown on a loan is the stated annual rate for that single loan, based on its standard repayment schedule. NAR measures the actual annualised return of your whole portfolio, including uninvested cash, the real timing of repayments and the mix of loans you hold.
The advertised rate assumes money is fully invested and repaid on schedule. In practice, uninvested cash between reinvestments, repayments that arrive earlier or later than planned, and the mix of loans and terms you hold can all bring your NAR below the headline rate.
Hive5 uses the XIRR method. It works out the single annual rate of return that matches the exact amounts and dates of every cash flow in your account, including periods when money isn’t earning interest.
Log in to your Hive5 account to see your NAR. It reflects every cash flow in your portfolio since you started investing.
Loyalty bonuses add to the return earned from standard interest rates, so they can increase the overall return on your portfolio. The programme applies automatically once you have been a Hive5 investor for more than 90 days and your active portfolio exceeds €5,000.
No. Advertised rates are based on standard repayment schedules, and your actual return depends on factors such as uninvested cash and repayment timing. Past performance is not a reliable indicator of future results; capital is at risk and returns are not guaranteed.
Related pages
Hive5 Loan Originators
The lending companies behind your investments
The lending companies behind your investments
See who issues and services the underlying loans, how each business operates and which contractual obligations apply before you invest.
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Your investment, explained step by step
Hive5 gives you access to contractual claim rights linked to existing loans.
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Where can I see current interest rates?
Interest rates vary depending on the Loan Originator, loan product and investment term.
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