> mortgage might be special because you don't outright own the property until you pay off the mortgage

I don't see how this is different.

From the lender's perspective, the property is just like any other security: it reduces the risk of the lender so they can reduce interest rates and compete. The same with ownership of a company.

From each lendee's perspective, their loan comes at a cost: if the thing they are using as a security falls through, they could go bankrupt paying it back, and lose their home as part of that process.

From the government's perspective: they've written the rules this way so that loans are not taxed, presumably for a good reason. It would be good to know that reason before we start changing the rules.