Unless it doesn't, of course. Viewed from this perspective, putting more cash down so as to lower your mortgage is effectively an investment with a guaranteed X% return, where X% is the interest rate on your mortgage.
I realise that on average the index fund is likely to outperform it over the long run, but a lot will depend on your attitude to risk.
Yes, true—the difference is, if the market stagnates you can take money out of the index fund and apply it to your mortgage at any time, whereas if you do a large down payment upfront, you can't change your mind later.
I realise that on average the index fund is likely to outperform it over the long run, but a lot will depend on your attitude to risk.