A NSW Police media spokesman said a crime scene had been set up at the Dale Crescent property just as usual operating procedure and the incident was still being investigated.

"We don't have reason to believe it was suspicious," he said.

Police said a man and woman, both 23, and a three-year-old boy were woken by smoke alarms and fled the single level house about 3.40am.

NSW Police said some neighbouring houses were evacuated as a precaution but there was no damage to other properties and no injuries.

A Fire and Rescue NSW spokesman said five fire trucks attended the blaze, which took about 50 minutes to bring under control and another house to completely extinguish.

Crews stayed on the scene until about 6.30am.

EARLIER: A Lavington home was destroyed by fire early Saturday morning.

Albury Civic Fire Station captain John Vandeven said the call came about 3.40am but the Dale Crescent house was "fully involved" when they arrived.

"The house is destroyed, they won't be able to occupy it, it will have to be rebuilt," he said.

The occupants had been woken by smoke alarms and were outside the home and accounted for when firefighters arrived.

IN OTHER NEWS:

Mr Vandeven said the incident offered a timely warning about the need for working smoke alarms.

"Without that, the consequences might have been completely different," he said.

Police and ambulance attended the scene, as did brigades from Albury Civic, Albury Central and Albury North.