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The plan starting Sept. 2 is part of a government push over the past few years to encourage home ownership and try to ease rocketing house prices. The costs of homes across Canada continue to increase, if by smaller amounts because of new rules tightening mortgage criteria.

The program, which may benefit as many as 100,000 Canadian families, works in the form of shared equity between the homeowner and the government via mortgage insurance providers Canada Guaranty, CMHC or Genworth, according to the minister.

It offers 5 per cent for buying an existing home and as much as 10 per cent toward a newly constructed one. The buyer has to repay the incentive after 25 years or when the property is sold, whichever is earlier, the CMHC statement showed.

The actual savings for a new home-buyer would depend on amortization, interest rates and mortgage terms, according to CMHC.

The program ties in with other initiatives such as increasing the amount that can be withdrawn from RRSPs to $35,000 a year from $25,000, the statement showed.

Richmond Hill MP Majid Jowhari said the incentive program frees up cash for middle class Canadian that can be spent on healthy food, sports activities for children or saving for the future.

“Thanks to mortgage payments that are more affordable, many families will have hundreds of dollars more each month in their pockets,” Jowhari said in the statement.

• Email: cmcclelland@postmedia.com