This argument makes no sense. The way to look at the issue is to consider households to be financial intermediaries. Financial intermediaries are most stable when their liabilities and assets have the same duration. Most households have two principal assets–their house, and their human capital. The house has long duration; the duration of jobs is variable. Fixed rate prepayable mortgages can have long duration, and because they have an embedded call option, the duration can be made variable.
Thus a prepayable fixed rate mortgage is a liability that matches well to a house’s long duration and the owner’s desire to have a free option to move to a new job. It helps stabilize household balance sheets.