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What is the correct order for mortgage loan types from lowest typical interest rate to highest typical interest rate?
fixed rate, balloon, ARM
balloon, ARM, fixed rate
balloon, fixed rate, ARM
fixed rate, ARM, balloon
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Answered by
GPT-5 mini
AI
Correct order: balloon, ARM, fixed-rate.
Rationale: Balloon loans are typically short-term and often carry the lowest rates; ARMs generally have lower initial rates than long-term fixed loans but can adjust later; fixed-rate mortgages usually have the highest (long-term) rates because the lender bears interest-rate risk.
Rationale: Balloon loans are typically short-term and often carry the lowest rates; ARMs generally have lower initial rates than long-term fixed loans but can adjust later; fixed-rate mortgages usually have the highest (long-term) rates because the lender bears interest-rate risk.
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