What are typically higher in subprime lending compared to prime lending?

In subprime lending, interest rates are typically higher than in prime lending due to the increased risk associated with lending to borrowers with lower credit scores. Subprime borrowers are usually perceived as more likely to default on their loans because of their less favorable credit histories. Lenders, in response to this heightened risk, charge higher interest rates to mitigate potential losses. This premium on interest rates compensates for the greater likelihood of non-repayment and reflects the increased cost of risk associated with subprime loans.

The other options do not accurately capture the distinctions between subprime and prime lending. For instance, property values and borrower incomes can vary widely and are not inherently correlated with the class of lending. Loan terms can be similar across both subprime and prime lending without impact on the interest rates specifically charged. Thus, it is the interest rates that provide the clearest differentiation between these two types of lending.