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I want my party leader to be a Paladin so I can wield Holy Avenger and I was looking at either Aasimar for all the wisdom and Cha bonuses (plus favored class) or human just for multiclassing to a PalofHelm/fighter.

What race should I pick?

If I pick Order of Helm and thus multi to a fighter, will I face an XP penalty if I picked the Aasimar?

As an Aasimar has Paladin as favoured class this means that Paladin will not count towards any XP penalty. This means you can have both Fighter and Paladin on an Aasimar with no XP penalty at all

Take an Aasimar.

The Holy Avenger isn't that great.
It's a 1-handed longsword. You'll only find it near the end of the game and you can do more damage with other weapons because of the extra strength bonus you get for 2-handed weapons.
The stat bonusses paladins get if you find it are very useful on the other hand.

I had a fighter4/paladin x for specialization in longswords because of it, but she used greatswords instead, even after finding it.

I recommend to take a paladin3/fighter with low wis since paladin spells are not that great. Stats: 18-13-18-3-8-20

Strength is essential for dealing out damage, 13 dex is needed for many combat feats, con for HP and saves, int is useless, wis gives only a small part of the enormous bonusses charisma gives.
If you raise only strength at level up and use a 2-handed weapon your tank will do enough damage to defeat even the hard monsters with a damage reduction of 15.

A pure paladin is probably superior to a fighter4/paladin at the end because he gets the holy power spell at level 15.

Thanks for the replies, I am new to this idea of multiclassing. I will consider your recommendations.

Love
Sweden