A Hawke's Bay family of two adults and five children escaped their burning house with just the clothes they were wearing.
Napier fire service senior station officer Bryan Dunphy said the three-bedroom in Onekawa, Napier, was well ablaze when three crews rushed to it shortly after 6pm yesterday.
The children, aged 7 and under, lived with their grandmother and were being bathed before dinner when the fire broke out in one of the bedrooms, a neighbour said.
One of the adults tried to put out the blaze "but it was too far gone for him", Mr Dunphy said.
Investigators worked into the evening, stripping back walls to find the cause of the blaze, which was not suspicious.
"They were very lucky to get out - they had a working smoke alarm," he said.
"They just got out with what they were wearing - they lost everything. I have been told they have contents insurance which is pretty fortunate."
The children were safe on a neighbour's lawn when fire crews arrived.
The house was unsafe for firefighters to enter at first, he said.
"There were some issues with the tiled roof. They are very heavy and they do give way, but it didn't take us very long to get it under control."
He estimated 95 per cent of the house was damaged.
"We got the ambulance there as a precaution but everyone seemed to be okay."
A Housing New Zealand official was on site last night. Neighbours said the family were staying with a nearby relative.