Firefighters and neighbours were beaten back by flames as they tried to save a family from a house fire in the Hunter Valley in New South Wales that left three children dead.

Authorities are investigating whether the blaze started in the fireplace of the Singleton home in the early hours of Wednesday morning.

Crews broke through windows to rescue two five-year-old girls from their smoke-filled bedrooms just seconds before they were engulfed by flames.

The young pair were rushed to Singleton Hospital but died soon after.

An boy, 11, was later found dead inside the burnt-out home. It’s believed the three children were siblings.

First responders managed to save a 31-year-old woman and her daughter, 8, who were treated by paramedics before being taken to hospital. The woman suffered burns to her back and forehead and her daughter was treated for smoke inhalation. Both remain in a stable condition.

Locals are now scrambling to raise money for the family.

A NSW police superintendent, Chad Gillies, said it was believed all five lived in the house.

“I would like to emphasise the heroic nature of the four residents in the nearby vicinity who tried to assist the people inside the house,” he told reporters.

Neighbours bringing flowers to the site of a fatal house fire in Singleton Photograph: Darren Pateman/AAP

Early investigations suggest the fire started at the front of the house, before spreading to the back of the home.

A Fire and Rescue NSW superintendent, Joshua Turner, confirmed there was a fireplace in the house, but it was too early to say if it had sparked the blaze.

“The fireplace is one of the factors that will be looked at to see if it was a factor, or if it can be eliminated,” he said. “But obviously during these winter months, heating appliances are quite prominent in fire causes.”

Smoke detectors were installed in the home and could be heard by neighbours and emergency crews.

“With the intensity of the fire ... the neighbours and those that attended and tried to assist did a pretty incredible job,” Turner said.

“The whole town is devastated by the news,” family friend Caitlyn Stemmer said on Wednesday.

“It’ll be a hard thing for everyone to get past.”

Stemmer started a GoFundMe campaign for the family in the hours following the blaze but is still in shock.

“The family will need to rebuild their lives and home, any help will be forever appreciated,” she wrote on the fundraising page, alongside a picture of the children in their school uniforms.

The appeal raised almost $20,000 within its first few hours.

Stemmer said the family are “tight-knit”, describing the mother and her partner as hardworking and caring parents.

“This may be a message for people to cuddle their kids for a little longer today,” Stemmer said.

A neighbour, Brock Forbes, said he and his family had been woken by a “big bang” and had tried to fight the blaze until fire crews arrived.

“[We heard] just smashing and screaming so we ran out and grabbed the hose,” he told the ABC. “I was trying to put the fire out and trying to save them and firefighters came and got it under control.”

Police, paramedics and firefighters admitted it was a tough and distressing time for crews, as it was for tight-knit locals.

“We’re all in this together,” Gillies said.

“These things tear at the heart of a local community like Singleton.”

NSW premier Gladys Berejiklian described it as a “shocking, horrific” accident.

“Our heart goes out to the family and loved ones of those victims,” she told reporters in Sydney.

“Can we please ask everybody to be safe, to take all the precautions necessary. We don’t want to see any other family experience this horrific tragedy.”