[quote=HLS]
Obviously not available today, but what if CD rates were 6%+ and the interest stream paid the full payment on an amortized mortgage ?[/quote]

Banks aren’t in the business of losing money. How would a condition where 30 year fixed mortgages are 3.5% and CD rates are 6% ever exist? Banks would be losing money like crazy if that condition ever came to pass.

Individually someone might be able to borrow at 3.5% and invest to earn a return at 7% but that can’t be the case at the macro level because the math doesn’t work. Almost everybody thinks that somehow they can win at this game of borrow low and earn a spread on the return. Of course plenty of people end up rich doing that and plenty of people end up in bankruptcy doing that.