what other pieces of info should I consider
- Do you have liquid cash available for unexpected home repairs?
- Is your mortgage fixed-rate or adjustable? Others have concluded that it is adjustable; when does it next adjust? What is the maximum rate it could adjust to, and what would that do to your monthly payment?
- What other stock-like assets do you own?
- What is the time horizon of the investment?
If you don't have liquid case available for unexpected repairs, then you probably don't want to use this money for either option.
The 7% return on the stocks is absolutely not guaranteed. There is a good amount of risk involved with any stock investment. Paying down the mortgage, by contrast, has a much lower risk. In the case of the mortgage, you know you'll get a 2.1% annual return until it adjusts, and then you can put some constraints on the return you'll get after it adjusts. In the case of stocks, it's reasonable to guess that it will return more than 2.1% annually if you hold it long enough. But there will be huge swings from month to month and from year to year. The sooner you need it, the more guaranteed you will want the return to be.
If you have few or no stock (or bond)-like assets, then (nearly) all of your wealth is in your house, and that is independent of the remaining balance on your mortgage. If you are going to sell the house soon, then you will want to diversify your assets to protect you against a drop in home value. If you are going to stay in the house forever, then you will eventually need non-house assets to consume.
Ultimately, neither option is inherently better; it really depends on what you need.