If you invest and get 7% interest, after taxes you may get 1-2%. If you have to get 12%+ things look a lot different. Also, investing is risky, debt anchors you and keeps you from trying new things. At that point, you're gambling your house away. That behaviour is exactly what caused the Great Depression.

Government bonds are a terrible investment strategy. You may barely hold out against inflation (the next 5 years I vey much doubt that will happen) but there's better vehicles. The stock market, for all that it's fallen, historically speaking has never had any 10 year windows that it's shrunk. It will rebound.

If you're going to get a mortgage, it should be a 15yr, fixed-rate.