Buy the best you can afford
I have a philosophy where I will buy only quality products, electronics or otherwise, because I find them most dependable and longer lasting. If I cannot afford the best item, I wait until I can. If you are of the philosophy of wanting the latest, greatest version frequently replacing items, by all means buying the least costly version would be your choice.
Late in 2014, I was fortunate to come into some money and decided it was time to replace my 2006 iMac even though it was still running well (note I tend to keep things for a long time). That iMac is so old that it only has a 32 bit core duo, not even a core 2 duo. It can only run OS X 10.6.8 (one of the best OS X versions Apple ever released) but it was increasingly problematic finding software that would work on it. It still runs well and now is helping children in an elementary school in the Philippines.
You can view the specs of my new iMac in my signature and note that everything was the fasted and largest available. I generally don't use the word thrilled but I can use thrilled to describe my purchase so far. The machine is blazing fast and other than the time I knocked it to the floor requiring expensive repairs, it has worked flawlessly. Many may not consider buying refurbished machines but my last 4 Mac purchases as well as my 64 GB iPad Air and 3T Time Capsule have all been refurbished purchases and I never had any problems with them. I will only purchase refurbished equipment from Apple though. The machines are returned for a variety of reasons sometimes because the original purchaser just changed their mind. Each item is disassembled, tested, repaired/replaced then reassembled and comes with a full, 1 year warranty. Again, nothing I have ever purchased from the Apple Store's refurbished area, including that 2006 iMac, has ever failed.
So summarizing, I recommend you check out the better or best quality iMacs in the refurbished section of Apple's Store (it can be hard to find but a link is usually at the bottom of each Apple Store page) and see if there is a model that meets your needs. You could save 15%, 20% maybe more which is money you can use to buy a better machine. Buy a machine with much more memory than you think you will ever need because Apple's OS's are only becoming more resource hungry. Buy the largest hard drive you can afford because I bet you will start downloading and saving more and more music and videos on the new machine. Consider a machine with a SSD as long as the SSD isn't too small. I installed a SSD in my 2012 MacBook Pro and increased memory and that 3 year old machine is very fast and seems brand new. When you have decided on the specs of your new machine, check the refurbished page frequently because items come and go sometimes several times a day. Good luck on your purchase.
Jim