The 20-year-old man was one of five at the Haplin St home when it erupted into flames about 5.45am on Saturday.

Neighbours woke to yelling and screaming as they rushed to help four other family members who had escaped.

One neighbour, who did not want to be identified, said the family had escaped with just the clothes on their backs.

"They were yelling and screaming and I got up and rang 000 straight away and then went out. There was nothing we could do," he said.

"One of them just had his jocks on and I went inside and got him pants and a jumper. It was pretty intense. We couldn't go into the house, windows were blowing out and the roof caved in."

A 22-year-old man was taken to Ballarat Health Services Base Hospital with mild smoke inhalation, said Ambulance Victoria spokesman John Mullen.

He left hospital several hours later.

It was not known if the house was fitted with smoke detectors.

Up to 20 firefighters from four brigades battled the blaze for an hour before it was brought under control.

Country Fire Authority Beaufort Brigade captain Colin Gerrard said it was impossible to reach the trapped man, who was found in the kitchen at the back of the house.

"We got here around 6am and it was fully involved," he said.

"There were two residents outside and after speaking to them we learned someone was trapped.

"We weren't able to get in because it was so hot and the roof had collapsed."

Melbourne arson squad detectives were at the scene for most of Saturday determining the cause of the fire.

Police still did not know the cause of the fire yesterday.

The name of the dead man has not been released.

A report will be prepared for the coroner.