The fire is now out with three fire appliances still at the scene dampening down the damaged areas.
Fire communication centre manager Peter Stevenson said two occupants were in the house but escaped with no injuries.
The fire had earlier got into the roof of the house.
Fire safety investigator Jon Rewi told the Rotorua Daily Post he had deemed the fire suspicious and police would investigate.
EARLIER: Fire services are currently at a house fire in Turangi.
Fire communication centre manager Peter Stevenson said a residential property in Rangipoia Place was currently "well alight" and four fire appliances were en route to the scene.
Two appliances from Turangi and two from Taupo were on their way.
The call came into emergency services at 9.51am.
More to come.