[pc86]

From another comment:

> $1M home at 3% interest(30year) = ~$4200 monthly payment. $800k home at 6% interest = $4800 monthly payment.

Over a 30 year term, your interest rate has much more impact on affordability than the purchase price does. 20% down is a drop in the bucket when your rate necessitates paying 1.5-2x the purchase price in interest because it's spread out over 30 years, especially at higher price points and at the edges of people's budgets.

[tricksforfree]

You can refinance in a few years, however you cannot change what the house price was when purchased.

If the house prices is lower, every extra payment to the principal will drastically decrease the interest over the entire term, much more-so than the initial larger loan/principal.