Final answer:
The bank is charging Tracy a high interest rate because they have less confidence in her ability to repay the loan.
Step-by-step explanation:
The bank is charging Tracy a high interest rate for her home loan because they have less confidence in her ability to repay the loan. Charging a higher interest rate helps to compensate the bank for the increased risk. This higher rate also ensures that if Tracy were to stop making payments in the future, the bank will have already received a larger portion of the loan amount.