Which loan type is generally expected to carry the highest initial interest rate?

The 30-year fixed rate mortgage is generally expected to carry the highest initial interest rate compared to other loan types listed. This is primarily due to the fact that it offers a long repayment term, which means the lender takes on more risk over an extended period. Since the interest rate is fixed for the entire life of the loan, it reflects this risk and typically results in a higher rate.

Moreover, the longer the term of the loan, the more uncertainty exists regarding future economic conditions, interest rate fluctuations, and inflation, all of which contribute to a higher upfront interest rate to compensate lenders. In contrast, other loan types such as the 15-year fixed-rate mortgage generally carry lower interest rates due to the shorter term and quicker repayment, which reduces the lender's risk. Adjustable-rate mortgages may start with lower initial rates but can change over time, and short-term fixed rate mortgages, while they might be competitive, are also usually lower due to their limited duration. Thus, the nature of a 30-year fixed rate mortgage's terms and conditions makes it the choice with the highest initial interest rate among the options provided.