Either way my plan is to pay off the mortgage ASAP. I make $185k TC. Mortgage is $312,000 left and I have $160,000 I can make a lump sum payment of. My current monthly payment is $1991. Interest rate is 6.5%. If I pay down mortgage: monthly payment remains $1991 but more portion goes towards principal and loan term reduces significantly. If I pay down and recast: new monthly payment becomes $1000 and loan term continues to be 30 years again. If I recast that allows me to save more of my monthly income and invest it and eventually pay down more later down the line.
If you’re paying down either way then recasting is better. The interest part of the payment is not affected by the loan length, it’s just the interest rate multiplied by the rate and divided by 12. So recasting just lowers how much principal you pay per month. The advantage here is that you could choose to then pay exactly how much additional principal you want to pay.
Depends on your risk tolerance. If post-tax growth > interest rate + mortgage tax deduction then technically investing is more efficient. However, if the market goes into a downturn and it’s 1, 5, 10 years before your investments break even, will you be ok (financially and emotionally). Personally, 6.5% is getting mighty close to historic growth of the market so I’d be tempted to pay down using most of that and then recast. That gives you a lot of flexibility in case you get laid off (lower monthly payments), and if interest rates drop you can refi.