Question: My partner and I are looking to buy at the moment. I won't get into all the details but we live in Germany, have a budget in mind and have talked with a few brokers and providers.

Our idea for the monthly repayment budget comes from what we pay in rent now as well as what we'd pay if we rented a property in a similar bracket to the ones we're trying to buy. And, of course, what we think is fair for the market.

We've had various estimates for mortgage offers and many are offering more than our initial budget idea so my question is is it better to take a higher mortgage for a more 'desirable' property and pay more per month if you can afford it or to be conservative and take a lower mortgage. We're currently finding the prices are a higher than we planned.

I realise it's subjective regarding risk etc but any input on pros and cons or going closer to your financial limits (within reason) with your mortgage payments would be greatly appreciated.

EDIT: I added a little more context to a comment on an answer that might be useful extra information:

We're buying in Berlin, Germany that has had record rises in both rent and purchase prices in recent years. Seems set to continue. Interest rates are at near record lows and I've consistently had offers of around 1.5% for 15-20 year fixed rate deals. We've been advised to lock in current rates for as long as possible, especially as there is talk of a rate rise here next year. Additionally, I have been offered options for a type of income insurance for the payments. So current numbers would have us spending 25% of net income per month.

Answer: 
This is one question that I’m not sure country matters. I’m in the US and my answer should apply to you. 

I’d recommend buying the size house that you need. The larger house comes with taxes, maintenance, the cost of heating/cooling, and cleaning. Instead of reaching for the largest house the bank says you can afford, get the smallest house you can tolerate. That will give you time to start a family, and see how much space you really need to live in. You can also get a far shorter mortgage, and likely have it paid off 10-12 year later. At that point, it would be easier to upsize if you really need another bedroom or two, compared to downsizing, if by the same time you were in a too-big house.
I'm currently in the process of buying a house and would recommend against taking a mortgage that's much higher than the rental rate you're paying now.

You've addressed the principal and interest aspects of a home mortgage, but one key difference between renting and owning is maintenance. It's 100% on you when you own.

For my personal situation, that includes spending some money right after closing to get the house move-in ready (there's some projects we want to do that are easiest without a bunch of stuff on the floors), planning for replacement of some major appliances in the next 5 years, maintaining the lawn area, plus unexpected issues. Furthermore, we are talking about some upgrades we might want to do in the next 5-10 years, which would need to start being saved for. Anyways, all those costs are above and beyond your monthly mortgage payment, so it's definitely helpful to have reserves.