No it isn’t, its a bet that the mortgage providers have a good handle on rates and set the fix so that over the term of the mortgage you pay more overall than if you had stayed on variable.
Otherwise what is the advantage/gain to the provider of offering a fixed rate mortgage. Do they offer it to magnanimously help you save money?
Or you could look at the fixed as the ‘product’ and the variable as the ‘bet’ rather than the other way arround.
The banks offer both just like bookies offer both football teams in a match. Their aim is to set the rates/odds so that the market buys them in proportion, so that when the rates change the bank should still make money.
e.g a match with 100:1 odds of team A winning. The bookies offer odds of 99:1 and 1:101, hoping that for every person buying a £1 bet at 99:1 they sell £101 of bets at 1:101, so regardless of the outcome they make £1. Which is why you should never bet on an England game, as the odds are limiting the bookies losses as they’ll sell a lot regardless of the odds. Same with local bookies on local teams.
Folowing that to the banking sector you should buy the unpopular product, as the bank will be discounting it to keep the distribution level between the products. But the clever people behind the scenes will be setting rates designed to attract just the right number of customers, and there’ll be targets/limits for each product to keep it that way.
