With today’s long-term amortizations, interest-only loans, and other unconventional mortgages, it’s getting easier and easier to buy more house than you should.

This CBC article reiterates an important rule of thumb:  “no more than 32 per cent of your gross income should go toward paying principle, interest and taxes on a home.”  It also suggests banking three to six months of mortgage payments in case of hardship. 

How much mortgage is too much?  BMO’s Cid Palacio says that if you gross $70,000 a year, $1,866 a month is the most you should spend on a mortgage.  That equates to a house of about $250,000 to $300,000.