Pay down your mortgage, or invest the extra money?  Contrary to popular recent reports, you do NOT increase the equity in your home by paying down your mortgage principal.  You merely decrease the principal amount owed, more quickly, and possibly reduce the total pay-off time, saving extra interest by paying-off the loan early.

     Only property value appreciation can increase your home's equity.  Increased equity is actually the difference between what you originally paid for the property and its revaluation, at any given time - not how much you still owe on the loan(If you don't believe me, ask the IRS).  Yes, if you have a lower principal, you will not have to pay-off as much when selling or refinancing, but the money has already come directly from you - so if you are doing it to 'force' savings, then I guess it could be an acceptable option.

     Depending on the interest rate of your current mortgage, you may be better advised to invest what you would have paid to decrease your loan principal amount into something that would guarantee a higher rate-of-return.  Consider investments in stocks, bonds, CD's, mutual funds, etc.  And the new 40-year fixed mortgage may be a financial windfall for those wanting to save money, while building equity, and not worrying about who owns the deed to the property!