This really depends on your goals for this money.
You don't seem to have any intention of spending it soon, but you don't want to risk it. By doing both, you'll end up with it stuck in a deposit account while inflation eats away at it.
Decide what you might spend this money on - your kids education? A new extension in 10 years time if you have more kids? Things like that. Then decide the bets way of protecting that money.
If it were my cash (oh how I wish!), I'd consider the following:
Mortgage - it's quite large and as Bob points out, it's costing you a fortune in interest each year. I'd consider bringing it down to a more reasonable level by banging 200k into it, and keeping up your current mortgage repayments, which should see it cleared sooner.
Any other debts - credit cards, car loans, etc. - clear them.
Safety - if either you or your partner were to lose their jobs, what kind of safety net would you need? Do you both work in the same company, which could result in a double-whammy? Work this one out and you'll probably end up with maybe 6-12 months salary after tax. Keep this somewhere where it is easy to get to - maybe a high interest deposit account.
Longer-term goals - inflation is your biggest enemy here, and to combat it you'll need to take on some degree of risk in the knowledge that, generally speaking, buying and holding good stocks/funds for 10 years plus is reasonably safe.
Best of luck with it anyway!