What a coincidence as I find myself in this exact situation. Normally I always go variable, but this case I forgot the rule of man plans, god laughs, so to speak. Yes RBC uses very "creative" math to calculate the penalty, and in my case the penalty is enormous. Does it suck? yes, can I blame anyone but myself? no. After pouting for some time, I did some more investigation and found as mentioned above, the prepayment privilege which in my case is 10%. So far so good. Only other options are have someone assume, or port it. Assumption is out of the question, since rates are less than they were two years ago, which is why the penalty is so high. If rates were higher now, it would have been the greater of 3 months interest, or the magic formula. The only option left is to port it to another property within 90 days, so selling our home is a blessing in disguise, as it has become a perfect opportunity to pick up a new rental property. The main lesson I learned here is to resist the urge to lock in, as life can change in a hurry!