Interest Rate Swap

Ok, PNC is pushing this Interest Rate Swap now. The mortgage rate is variable until the second I sign at the closing. Then it is fixed for the term of the loan. But . . . the pre-payment penalty is calculated with something called an Interest Rate Swap. I am not 100% clear on what it is and the guys at the PNC Branch dont even know. The mortgage broker told me it is calculated by the difference in the prime rate and their pre-payment rate. If the prime rate goes down, I will have to pay a certain amount if I want to refinance or sell before the term is up. If the prime rate goes up PNC will pay me a certain amount depending on where I am in the term.

Anyone deal with this yet? Wiki says it has been around since the 70s or 80s but only on large deals. Interest Rate Swaps are becoming more popular on smaller deals now? Mine was just over a $1mil deal.