Emergency services were called to the Henry Street property about 7am on Monday.

Fire appeared to have started in the rear of the property, with a heat gun thought to have sparked the flames.

Fire and Rescue NSW Inspector Stewart Alexander said 75 per cent of the home had been damaged by flames and the rest damaged by smoke and water.

“On arrival, firefighters found the house well alight,” he said.

“Their quick actions extinguished the fire.

“Unfortunately there’s a lot of structural damage to the house – particularly in the back part of the building – and some minor structural damage to the neighbouring property from the heat.”

A shed at the property next door partially caught alight but was quickly extinguished by the firefighters.

Next door resident Kellie-Anne Talbot said she had heard a loud noise as the flames took hold and started to spread. 

“It sounded like someone had dropped plates or glass, then I heard a crackling noise,” she said.

“I opened the curtains and the house was on fire.

“I’ve got a three-year-old and an almost two-year-old.

“I ran outside to see what was happening and got my girls out.”

Inspector Alexander said the fire had spread rapidly through the wood and weatherboard home.

The house was insured.

The retired owners, aged in their 60s, had been travelling to Albury at the time the fire started. 

“Statistically you get more house fires in the winter period because people have more heat sources on to keep warm,” Inspector Alexander said. 

“But there's always a risk any time of the year. 

“The cautionary tale is to make sure if you're using any sort of tool that generates heat, that it's turned off and secure once you've finished using it.”

He also urged people to check their smoke alarms were working. 

Firefighters from Corowa, Wahgunyah and Albury had attended the incident and many stayed on scene for several hours. 

The home, which contained asbestos, was examined after the fire was extinguished in a bid to determine the cause.