Craig Franklin, 48, was voluntarily admitted to a Warrnambool mental health unit on October 29, 2019, after police conducted a welfare check on him at a property in Nullawarre, where he'd been staying in a caravan after the breakdown of his marriage.

He left the hospital ward the following day and walked to the family home in Warrnambool's Wares Road, arriving at 3.24pm.

Less than five minutes later a neighbour noticed flames coming from the window of the house.

Franklin fled on a motorbike at speeds exceeding 150km/h on the Princes Highway and over 100km/h through roadworks on the Great Ocean Road.

He then returned to the mental health unit.

The arson attack caused more than $200,000 damage to the home and killed two pet birds and a cat.

On Wednesday Franklin pleaded guilty to arson and driving in a dangerous manner.

The victim said in a statement that she entered her street on the afternoon of October 29 to see a house engulfed in flames.

"Imagine being stopped by police and informed that the house engulfed in flames is in fact your family home and the perpetrator is your husband and the father to your three children," she said.

The victim said the incident had left their family overwhelmed and anxious, triggered by open flames on a heater or the sound of emergency vehicles.

She said the arson attack left them homeless for weeks and devastated by the loss of their pets.

She said she had reoccurring nightmares where she and her children died in a fire.

Lawyer Rohan Lawrence said the offending was impulsive and committed in the context of "severe psychological distress".

He said Franklin was suffering "suicidal ideation and emotional turmoil" and that the offending was "undoubtedly" influenced by animosity and anger.

Mr Lawrence said the offending was not premediated and CCTV footage showed Franklin leaving the mental health unit and walking to the family home.

He said it was there that his client likely started the fire using a lighter or a match.

"It did not involve the use of any flammable material," he said.

Mr Lawrence said his client was aware that no one was home at the time of the arson attack but he accepted Franklin was reckless to the fact the pets were inside.

The plea hearing before Judge Michael O'Connell will continue on Friday.

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