I can see the appeal of something like this, especially during low levels of play, but the fragility of something like this depends on your players. Even as a feat, this can be very powerful.
If you have inexperienced or somewhat lazy players, this can create incentive to get more familiar and comfortable with their spell list. That being said, this can be totally abused by experienced players and power-gamers.
If you're aiming to encourage your prepared spell-casters to try to implement a greater variation of their spells, maybe try adding a magic item like the Mnemonic Vestment.
I like the rule, especially when the intention is to have the caster keep pace with martial brutes in the early game, though I would probably do away this by level 6.
Honestly, I don't think it is such an unbalancing rule. Giving up a prepared 2nd level spell for any first level spell (that you could otherwise prepare) is powerful, but probably not broken game powerful. Worth a feat probably.
If it was a universal ability I'd be tempted to make it be 2 levels higher though (at least to start) and it takes an standard action to 'convert' the spell before you can spend the actions required to cast the spell.
Prepared 3rd for any 1st, Prepared 4th for any second etc. and and extra standard action casting time is onerous enough that I doubt that would break anything or be used except in real emergencies.
I want to introduce a houserule for my campaign and want to make sure it isn't too powerful. What do you think? Too powerful? Maybe require a feat to do it?
Non-spontaneous casters can cast spells spontaneously if they use a spell slot higher than the level of the spell.
That's a bit like making wizards into Arcanists.
Which is what your players should do if they want such a power.
Also yeah, all prepared casters can leave slots open and fill them later.