Once again it depends on your risk tolerance. I know when I signed my first mortgage I was all worried about a variable rate. Didn't want to be running for my Excel worksheets everytime the Bank of Canada raised the rates. Next time however, I'm going variable rate for sure, as long as it has lockable provisions. I'd of saved another $2500 over 5 years had I done so.
Not sure if other banks will pay your penalty for you. That was never suggested to me back when I looked into refinancing my mortage a year or so back. Check with the mortgage brokers - gives you an excuse to call that sexy mortgage broker!
