What is a general annuity in the context of mortgages?

In the context of mortgages, a general annuity refers to a financial product that involves a series of equal payments made at regular intervals over a specified period. The key aspect of a general annuity is that the compounding frequency of the interest is not necessarily aligned with the payment frequency. Therefore, option C is correct because it highlights that the compounding and payment frequencies do not match in a general annuity.

This distinction is important in mortgage contexts because it affects how the total cost of borrowing is calculated. For example, if mortgage payments are made monthly but interest is compounded quarterly, the effective interest rate and the overall costs associated with the mortgage can vary significantly compared to a situation where both compounding and payment frequencies are identical.

The other options describe different scenarios that do not accurately reflect the characteristics of a general annuity. For instance, stating that compounding and payment frequencies are identical refers to an ordinary annuity, which is not the case in a general annuity. Similarly, defining a general annuity as when interest is paid annually or as a fixed amount being paid quarterly misrepresents the arrangement of payments and interest calculations pivotal to understanding general annuities.