It might help to have more information. How close to retiring are you? Does your spouse also work, and would moving affect that? Have you been tracking your expenses and income so that you know how more money toward the house would affect you?
A two-hour round-trip commute sounds miserable. I'd want to move closer if it were me, especially if I had a family. If at some point you do retire early, you could sell the more expensive house and move somewhere cheaper. But you can't get back the lost time.
I bought a tiny place that was as close to work as I could afford. I don't have a guest room or anything, but I do have a 15-minute bicycle ride to work on a cycle path through a nature reserve. The place is stupidly expensive for a small apartment, but it's a huge difference in quality of life. I'm hoping I can recoup the cost when/if I eventually move, but at least in the meantime, I have a lot more time, fresh air, exercise, and opportunities for social activities.