In UK you always get a fixed rate for X number of years, then it automatically move to variable(but at that point you'd just remortgage again). Like we're on a 1.29% 5-year fixed mortgage, but the whole thing is 20 years long. But after 5 years we'll just remortgage again on new terms.
We also could have had 1.12% I think, if we increased our LVT to like 60%, but I didn't have the cash to do that at the time. It was in September 2021, so basically the historically lowest interest rates time in UK, ever - we were quite lucky to be remortgaging at that point. My sister is just getting a mortgage herself now and the lowest she can find is about 3% for 5-year fixed mortgage.
Where it goes wrong is when you remortgage in a higher rate regime, and the bank won't give you a new fixed mortgage to cover your remaining capital. Now you're stuck on the "punishment" variable rate you get when you don't remortgage.
you don't "always". The mortgage industry has a long history of different optimal strategies given different scenarios. For example, overpayment and payment holidays without incurring penalties used to be features only available on tracker mortgages. Discounted (yet still fluctuating) rates used to be effective.
Fixed rate mortgages are popular with people that don't want to take on the risk of payment fluctuation as well as in economic environments such as today.
In the UK even fixed rate mortgages are only fixed for the first couple of years, which wasn't so bad as rates were decreasing, but obviously things might change in the next couple of years.
