A father and his four children escaped the inferno about 2am on Monday at their home in the small town of Bowen Mountain, in the foothills of the NSW Blue Mountains.
All five were discharged from Nepean Hospital on Tuesday morning after being treated for smoke inhalation and minor burns.
Police believe two bodies found inside the home are two children, but they are yet to be formally identified.
One body was found on the top floor of the house and the other downstairs.
The deadly fire, which caused a roof to collapse, has triggered an outpouring of support from the tight-knit, family-friendly community of less than 2000.
A fundraiser to support the family has raised more than $21,000 since it was set up on Monday.
Local federal MP Susan Templeman thanked firefighters and paid tribute to the family.
"News of two deaths and others taken to hospital after a house fire at Bowen Mountain is deeply distressing," she wrote in a post on social media.
"Sincere condolences to the family and local residents in this close-knit Bowen Mountain community."
Hawkesbury councillor Mary Lyons-Buckett said she was struggling to comprehend the loss from such a "deeply tragic house fire".
"Tragedies like this impact us all in different ways," she said in a post on social media.
"As a community, we are at our strongest when we come together to support one another."
Fellow councillor Mike Creed said the community would "wrap around those affected in the days ahead"
NSW Police Superintendent Natalie Roberts said the rest of the family escaped the blaze, which happened on the morning they were all due to move interstate.
The mother of the children - who range in age from three to 16 - had been on her way to their new home in Queensland at the time of the fire, she said.
Neighbours tried to help with initial efforts to fight the fire but couldn't get inside the property due to the intensity of the blaze, authorities said.
The fire is not being treated as suspicious.
When firefighters arrived, the blaze had burned through much of the home's roof cavity and caused structural damage, Rural Fire Service Superintendent Jonathon Hill said.
About 60 firefighters were needed to bring the fire under control about 3.30am, but many were forced to withdraw before the roof caved in.
Hawkesbury Headquarters Rural Fire Brigade said their district "stood together with professionalism, strength, and care" and commended those involved for working under such challenging circumstances.
"Moments like these can leave a lasting impact," the brigade said.
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