I think it's really a matter of how much you are prepared for renting it out. I was in a similar situation as you and decided to rent out my house.
There can be quite a lot of work involved getting tenants, doing up a lease, worrying about how they are treating the house, cleaning up the house in between tenants, having to call out to fix things, registering with prtb etc.
Plus from a financial point of view you become liable for capital gains tax when you sell, plus tax on rental income has to be declared etc and possibly stamp duty clawback as well.
So i'd say only rent it out if you are prepared for all the above hassle. Personally I think the extra flexibility that you will have from the smaller mortgage would be better. (from a lifestyle point of view, not neccessarily a financial one!)