a thirty year mortgage over age 60. I know. I got one three years ago. My mother got one at age 60 in 1976. I remember at the time being utterly astonished that someone that age could get a thirty year mortgage when she was only five years from retirement and collecting social security. When I went to apply for my mortgage, I wasn't even remotely concerned about my age.
You need to look at several things. First of all, I agree with you that liquidity can be a lot more important than a lower mortgage balance. If you can currently afford your monthly payment, and if you expect to be able to afford it (by which I mean you can also buy food and gas for the car and so on) in retirement, then my advice is to simply make the regular monthly payment and simply bank the $200 extra. Heck, you might be able to afford a nice cruise in a few years.
Here's another thing. You have kids. They live elsewhere. At some point you will pass on and the kids will inherit whatever there is to inherit. Just make sure you let them know at some point in the reasonably near future exactly what your financial status is. Having some savings built up could be very convenient if, say 20 years from now, you and your wife die. There is still a mortgage payment due. If you've set it up right, and the kids know what to expect, they can continue the payments until the house is sold or one of them moves in or whatever.
I am also assuming and hoping that your children are themselves financially self-sufficient. If any of them have any kind of special needs, that's totally different, and you definitely need professional advice. But I'm assuming they are normal, self-sufficient adults.
Another thing to be thinking about is how long do you realistically expect to live? How long have your relatives lived? Your wife's? If one side is very long-lived and the other shorter-lived, you need to be taking that into account. Also, assume that all other things being equal, you'll live five to seven years longer than the men in your father's generation. Maybe even longer. Your wife might easily surpass her female relatives by ten years.
My two sons are relatively young, 25 and 29. I'm going to give it a couple more years before I sit them down and lay out my entire financial situation to them. Right now I have sisters, one older and one younger, and they are currently the ones responsible for settling my estate, such as it is. Once the younger one turns thirty (and we sisters are now all over 70) I will turn everything over to my sons.
Anyway, back to the original point. Now that you are over 60, paying off the mortgage isn't the same issue as if you'd bought this house when you were 30 and just beginning to raise your family. What matters (in my opinion) is, can you afford the monthly payment? The answer from what you've indicated is clearly a yes. But you're wanting to put extra money down. The question to ask is, Will putting that extra money down negatively impact your future?
There's no one easy answer. Good luck, and if you feel like it, let us know what you've decided.
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