The Tarawa Drive home was unoccupied when fire broke out at 10.45pm on Friday.

Four CFA fire trucks took about 10 minutes to bring the fire under control, but the damage already done to the brick veneer building was significant.

Ballarat Criminal Investigation Unit Detective Senior Constable Dave McLennan said initial estimates put the damage bill at $160,000.

"It's substantial. That's (the figure) probably fairly conservative actually."

Billy Slater, who lived at the house, said he had been at a neighbour's house when the fire started.

He said he had been left with only the clothes he was wearing and would probably stay with friends.

Neighbour Tara Hopkins said she had had dinner at the house earlier on Friday night.

She was at her house across the road when the fire started.

"We all freaked out. We ran out and saw the house was on fire," she said.

"The police and fire brigade said the temperature (of the fire) was so hot, if the brigade had been five minutes more the roof would have collapsed."

Det Sen Const McLennan said police were treating the fire as suspicious and inquiries into the fire were continuing.

Anyone with information should call Ballarat Police on 5336 6000 or Crime Stoppers on 1800 333 000.