Portland police Sergeant Daniel Lehman said the dogs were OK.

He said the alarm was raised just before 2pm Thursday when the neighbour noticed the fire in a bedroom of the Arthur Street home in south Portland.

"The cause of the fire is believed to be not suspicious," he said.

"The fire chief is still getting an investigator to look into the cause. It's believed to be an electrical mishap. We're not sure at this stage if it was an electrical fault or user error."

 Sergeant Lehmann said there was major damage to one bedroom and smoke and water damage throughout the house.

"The fire started in the bedroom. The occupants were not home, the female neighbour heard smoke alarm and looked into it.

"The neighbour rang one of the occupants and then triple 0. The Country Fire Authority responded fairly promptly which limited most of the damage to that bedroom."

The policeman said the neighbour was aware there were two dogs in the house.

"She smashed a window to allow them to escape. It was a pretty good effort,"  Sergeant Lehmann said.