Supposing you had a mortgage... let's say a $300k to $500k mortgage. If you could sell it and pick up whatever equity you had in it, would you ever consider buying a $300k to $500k boat and having a similar loan amount?
My wife and I are going back and forth between a big expensive boat that would replace our mortgage (payments would be a little lower because of equity in the home, but it would still be something upwards of a house payment), or a smaller and cheaper boat with very little debt. Her perspective is that if we're going to do it, we should go all-in and have a very nice boat. Me, on the other hand, am very concerned about the diminishing value of a boat vs. the increasing value of a house, and love the idea of being nearly debt free.
How have you wrestled with this decision?
My answer is "no way." The boat depreciates too rapidly and requires too much maintenance. Plus it requires a slip somewhere. But even more, I can far more easily sell the house. I maintain more flexibility. I would never tie everything I had up in a boat.
As to debt vs. cash, I'm afraid it's much too easy for those of us with available cash to say we'd never go into debt on a boat. That's great, but not practical for the vast majority of boat owners. What I would say is I'd suggest one not extend too far into debt for a boat. For instance, someone might buy a $200,000 home and finance $190,000 and most of the time they're safe. The exception was a few years ago when the market dropped and suddenly they were upside down. However, I'd never finance a boat like that. You'd be guaranteed to be upside down quickly. I personally think financing any boat over 70% is dangerous. Therefore, I wouldn't finance a $200,000 boat more than $140,000. If $30,000 was all I could afford to pay down, I'd only buy a $100,000 boat.
One other consideration, especially in the OP's case. One often has no idea if they'll like living on a boat. However, jumping back to a house isn't easy and it won't be nearly the house you left. If you are retired and have a 3000 sq ft home and plan on going to a 1200 sq ft condo, that's fine. But if you leave a $500k house for a $500k boat, you'll be moving back in to far less house. The old house may be $600k now and you may only get $400k for the boat.