The house fire in Iona Drive, Sebastopol, started around 6.50am when neighbours called in reports of 'flames coming out the windows'. 

The police arson squad is en route to the home to investigate, as the cause of the fire is unknown.

Ambulance Victoria confirmed paramedics were called to the scene, but there were no patients requiring care. 

Jazz, who lives on the street and called in the fire, said she woke up around 6.30am before she heard a loud smash. 

"I looked out the window, and the children's bedroom was just completely engulfed," she said. 

"The flames were massive, all coming from inside the house.

"The people that live there haven't been in there for days."

Lucas CFA's Ben Reynolds said there was one room of the house fully aflame when crews from Lucas, Ballarat City and Sebastopol arrived. 

"It seems like an unoccupied house ... we heard from the neighbours that no one has been around for a couple of days, which crews confirmed with primary and secondary searches," Mr Reynolds said. 

A next door neighbour to the house said he was woken up by other residents of the street pounding on his door, with fears the fire could jump to his property.