
There are many rules of thumb and people tend to follow the one that meets their expectations. The prevailing qualifying ratio is 28/36 - which means that your monthly payment should not exceed 28% of your gross monthly income (combined, if making a joint purchase), and 36% of your income net of all other debt payments (installments, credit cards, etc.).
While many people have 95% and 100% mortgages with payments that take up most of their income, the advice we give to our customers is to leave yourself enough money to enjoy your new home.
What can you afford?