The preferred loan type originated and retained by most depository institutions is the:

The preferred loan type originated and retained by most depository institutions is the fixed-rate mortgage. This option is favored because it provides both lenders and borrowers with stability and predictability. Fixed-rate mortgages have consistent monthly payments throughout the life of the loan, which makes them easier for borrowers to budget over the long term. Lenders are also attracted to fixed-rate mortgages because they can promote a consistent income stream and allow for better risk management over time.

In contrast, adjustable-rate mortgages can fluctuate, leading to potential payment variability that may pose risks to borrowers if interest rates rise significantly. Subprime mortgages cater to borrowers with lower credit scores and higher risk profiles, often coming with less favorable terms that are not typically retained by depository institutions. Home equity lines of credit offer flexibility but are not as common in terms of originating loans that are retained for long periods, as they usually serve a different purpose compared to standard mortgage products.