Millions more Australians are set to become eligible for the Federal Government’s Home Loan Guarantee Scheme.

Under the scheme the Federal government acts as guarantor on up to 15% of a loan for prospective home buyers, allowing them to buy a house with a deposit of just 5% and avoid paying costly mortgage lender’s insurance.

The criteria will be expanded from July 1 to allow friends and family who wish to join forces to buy their first home together to access the scheme.

Previously the definition of a couple for the scheme was only married or de facto relationships. The changes mean “any two eligible individuals”, including sibling pairs, a parent and child, or two friends, can apply for the scheme.

It will also be eligible for people who haven’t owned a home in ten years, which the government says will help those who have fallen out of homeownership, potentially through a financial crisis or a relationship breakdown, to also buy.