There are two important measures in this budget. First would have applicability for some people who have savings in their registered retirement savings plan. We increased the ability for people to take money out of their RRSPs to put toward their first home from $25,000 to $35,000. That will obviously not help everyone, because many people won't have that amount of money in an RRSP, but for some people it will enable them to have more money to put toward their first home.
Second, importantly, we looked at how we could find a way to target first-time homebuyers and make the possibility of a home more feasible for them. We've come up with a first-time homebuyers incentive. This incentive is targeted, obviously, to first-time homebuyers, but also to people who are just not quite able to get into the market.
Families with up to $120,000 in annual income will be able to buy a home of up to four times that income, so up to $480,000. They'll be able to take part of their mortgage, either 5% for an existing home or 10% for a new home, and put that to the Canada Mortgage and Housing Corporation in the form of what we call a shared equity mortgage. This would effectively reduce the amount of their monthly mortgage payments by 5% or 10%, which would give them the ability to get into a home more rapidly and do so in a way that would allow them to have more income to raise their families, which is the situation for many people.
There are about 500,000 homes purchased each year in Canada, but 100,000 of them are by first-time homebuyers. This will increase by maybe 30% in each of three years, so there will possibly be up to 100,000 new families over a three-year period who will be able to get into a first home who wouldn't have otherwise. It's a significant change.