Flames had engulfed the roof by the time volunteer firefighters from Balclutha, Clutha Valley and Tapanui arrived at the house shortly after 2pm.
Senior firefighter Arnie Tuhura, of Clutha Valley, said they were called to a chimney fire at the Chapman Rd house after the occupant, a mother of four, smelled smoke.
The woman was unharmed and her children were at school at the time.
Firefighters spent over four hours dampening flames and hot spots in the smouldering house, pulling off roof iron to extinguish the blaze.
Mr Tuhura said it was the second time firefighters had been called to a blaze at the house.
The earlier fire, in 2000, damaged the kitchen and lounge, and there was smoke damage to the rest of the house.
He suspected both blazes were caused by a fireplace that had not been installed properly.
A water tanker from Tapanui was called to the fire after a Balclutha tanker broke down close to the Balclutha station.
The problem was believed to be a dead battery.
Last week, volunteer fire services were called to two house fires in rural North Otago. A 100-year-old home was gutted and another home was significantly damaged.
Those fires prompted North Otago Federated Farmers president Richard Strowger to urge farmers to be extra careful when it came to fire safety.
