Neighbours suspect a fire which destroyed a home in Sydney's south-west was deliberately lit.

A woman and her two children were inside the home on Whistler Avenue, Ingleburn, when it was engulfed in flames just after lunchtime.

They managed to escape the blaze unhurt, but the home was extensively damaged.

"It's just devastating for the people that it happened to, it's not fair," the victim's friend Bradley Hinchcliffe said.