Which statement accurately describes a fixed-rate mortgage?

A fixed-rate mortgage is characterized by having an interest rate that remains consistent throughout the entire term of the loan. This stability allows borrowers to predict their monthly payments with certainty, as they will not be affected by market fluctuations or changes to interest rates over time. This predictability can be advantageous for budgeting and financial planning, as borrowers know exactly how much they will need to pay each month for the duration of the mortgage.

In contrast, options that state the interest rate may change periodically or that payments fluctuate with market conditions refer to adjustable-rate mortgages (ARMs) where interest rates can vary based on market changes. The statement about the loan needing to be paid in full within one year does not accurately represent a fixed-rate mortgage, as these loans often have longer terms, typically ranging from 15 to 30 years. Thus, the defining feature of a fixed-rate mortgage is its consistent interest rate, making option B the correct answer.