The best way to avoid paying more than you can afford is to be prepared. Before heading into that open house, figure out how much of a mortgage you can afford. There are some handy rules of thumb. Your monthly housing costs, including mortgage payments, taxes and heating bills, shouldn't exceed 32 per cent of your gross monthly household income. You also want to make sure that your entire monthly debt, including credit card and car payments, does not exceed 40 per cent of your gross monthly income.