Police are still yet to formally identify the bodies found in a burnt-out house in Bonner on Monday morning, but the ABC understands a woman and her two young children lived there.

The fire destroyed the property in Canberra's north on Monday morning and ACT Policing said it was deliberately lit and no-one was in custody.

Earlier, a man was taken into custody to assist with inquiries and he was released without charge.

ACT Policing Superintendent Scott Moller said there were multiple seats of fire and they would be looking into "all kinds of accelerants used".

He said on Monday he was unable to confirm the ages or genders of the dead and the formal identification process remains ongoing, with police working in difficult conditions.

Police have not formally identified the bodies found in the house. ( ABC News: Jake Evans )

Authorities were called to the fire about 8:40am and firefighters found bodies while trying to put out the blaze, according to Mr Moller.

"They fought the fire through the house, identified a number of people in the house that their belief was they were deceased and then [the firefighters] extracted themselves due to smoke and heat," he said.

Part of the investigation will focus on whether they died before the fire and police will prepare a report for the coroner.

Neighbours say they are deeply upset by the tragedy. ( ABC News: Elise Pianegonda )

The scene was locked down all day Monday. The street was reopened this morning, but the house remains cordoned off.

Mr Moller described it as a "horrific scene" and spoke of the use of welfare for police and other emergency services personnel.

Neighbours said they were shocked by the fire, but they did not have much of a relationship with the family who lived at the house.

ACT Policing's Criminal Investigations unit is handling an investigation into the fire. ( ABC News: Jake Evans. )

"They kept to themselves. There was never a lot of activity around the house," Brendan O'Brien said.

"[I] didn't really know who lived there. Didn't even know that there was kids there or anything like that.

"Around here, the kids were always playing, you always see the kids out on the street. But there, that house … [there was] very, very little activity.