People use all kinds of accounting tricks to convince themselves that some purchase or other makes financial sense. Trading in their perfectly good 2 year old car for a brand new one, buying on finance when they could buy a cheaper one outright. I'm sceptical that it ever pays off that way.

It's not an accounting trick; it's historically low rates. At the beginning of 2021 would you rather have paid 350k cash for a house or taken a 30 year mortgage and invested the remaining 80% (after a 20% down payment) into the sp500? Your house might be up around 10-25% depending on the market making your 20% stake worth more. and your 280k cost-basis that you invested would be worth 350k. You'd have already earned your down payment back before the end of the year.

If you think the return of your investments will >= 3% mortgage rates then you're losing money by not taking on debt (albeit with a bit of risk).

If instead of buying the house cash I put it all into bitcoin at the begining of the year I'd now have enough to pay off the mortgage, the early repayment fee and have change to spare.

This being the utter fucking fallacy of hypothesising with the benefit of perfect information.

Personally I wouldn't touch bitcoin, nor do I consider it an asset. Returns on stock investments are historically high for the last couple of decades it's true, but if you take the average of say 5% a year, it's still much better than putting that money into a mortgage, when you can borrow the money over a long time period at < 1% (as in the UK for example), or even at 3%.

It's not a trick, it's simple maths. It certainly doesn't always work, and there are risks involved, so not everyone will agree on the right decision, but there is clearly a path where borrowing money to pay for a large asset makes sense.

You've basically just reinvented the endowment mortgage. That went really well for everyone in the 90s.

No. I wasn't suggesting investing to pay off the mortgage (endowment mortgage), but investing as an alternative use of funds compared to paying off a debt held at low interest rates in a rapidly depreciating currency.

Imagine a more extreme example:

Interest rates 0.1%, Inflation 10%, 30 year term, leverage meaning your 50k becomes say 500k invested.

Now it makes sense to take on as much debt as you can get over say 30 years, and to put off paying it as long as possible, because even after a few years the payments will be quite minor compared to your inflating income, and at the end of the 30 years the debt you have left and the interest payments on it will be trivial compared to your income.