What is a loan on a borrower's primary dwelling with an APR exceeding 1.5% of the applicable average prime offer rate for a first lien loan called?

A loan on a borrower's primary dwelling that has an Annual Percentage Rate (APR) exceeding 1.5% of the applicable average prime offer rate for a first lien loan is defined as a higher-priced loan. This classification is significant because it helps identify loans that may present a greater risk for borrowers due to higher interest rates compared to standard market rates.

Higher-priced loans are subject to specific regulations under federal law, particularly under the Home Ownership and Equity Protection Act (HOEPA) and the regulations set forth by the Consumer Financial Protection Bureau (CFPB). These rules aim to protect consumers from potentially predatory lending practices that can lead to financial distress. Such loans may have additional disclosure requirements and may restrict certain loan terms, which are designed to ensure that borrowers are fully informed about the costs associated with their loans.

In this context, it is crucial to understand that while "high-cost loans" do exist, they typically refer to a different set of criteria that involve additional costs, such as fees that exceed a certain percentage of the loan amount. A conventional loan is a standard mortgage without any government backing and does not specifically relate to the APR in context. A subprime loan refers to those made to borrowers with lower credit ratings, often associated with higher risks