[smeej]

Low interest rates mean more of the payment builds equity, which you have a higher chance of getting back when you sell ("higher" as in "not zero," since you definitely don't get any interest payments back when you sell).

You can also borrow against that equity, but definitely not against the interest.

The amount you pay for the house might be the same whether it's the sticker price or the interest rate that was higher, but what that does for your overall wealth is different, and lower interest rates are better.

[chiefalchemist]

You left out how demand increases price, and in turn the total cost of the mortgage. Calculating your equity is relative to those. It's not as absolute as you think it is.