Having read the Sword of Truth series I am intrigued with your idea. But I would put some levels above ground (living rooms tend to be a lot more cozy if they have windows and fresh air isn't dangerous either). Just start at "ground level" (at the foot of the mountain or halfway up) and every time you have need for some new rooms either dig into the ground or add another tower or build further up the mountain, that way the whole building will gain a "natural" feel having grown with time.