There have been a few threads on this subject recently but I am too lazy to look them up at the moment. The conclusion from those threads is that it is better to buy at a lower price and higher interest rate, for these reasons (payment being equal):
1) Obviously, it is better to owe the bank $320,000 instead of $640,000.
2) You get a much larger tax write-off with a higher rate.
3) With a high interest rate, you can refinance if rates drop. It is hard to imagine refinancing a loan taken out at today’s rates.
I think there are a couple other reasons I am missing.
