In assessing whether to pay down some extra money off your mortgage, you are basically deciding whether or not to invest money for a very long term to earn 5% (or whatever your mortgage rate is) per annum net of tax on that money. And that’s it. There is no magic money, there’s no leveraging of your investment to get a 5x, 10x, 20x return. Your rate of return doesn’t increase if you make the paydown sooner – it’s still 5% per annum – but obviously, the longer you 'invest', the greater your return in pure € terms. 5% pa net of tax is a very solid return on your savings but it’s not a spectacular, once-in-a-lifetime return worth eating porridge and baked beans for years on end to achieve.
If you want a long-term ‘lock away my money so I can’t spend it’ investment (which is what paying down your mortgage is), you might be better investing in a pension if you are a higher rate tax payer and can find a low-cost pension. You get tax-relief on the way in, returns compound tax-free within the fund and you can get 25% of your fund tax-free at retirement. Depends on your age and mortgage term but it's probably not much longer-term an investment than paying down the mortgage.
