Prepayment Penalty

Q: During my recent refinance, I was surprised to learn I had a prepayment penalty on my old loan. I can't recall ever being told about it. Is this standard practice?
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Q: Can a lender charge a prepayment penalty of 6 months interest on 100% of the remaining loan balance? My understanding is that a lender could only charge the agreed term (6 months interest) on 80% of the remaining balance.
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Q: If I pay off a mortgage with a Prepayment Penalty, is it a tax-deductible item for me?
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Q: My wife and I refinanced our home one year ago. We are in a non-fixed rate. We cannot change our current loan because of a penalty. We are stuck until June 06. What should we do: pay the penalty and get a fixed rate or ride out the storm and see in a year what the rates are? Any help would be greatly appreciated.
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