The woman escaped without a scratch, but the man was taken to hospital with critical injuries, before he died.
The suspicious fire caused “significant” damage to a double-storey house on Rhodes Parade in Pascoe Vale about 4.30am on Monday morning.
Police said they were initially alerted to the incident after reports of a man smashing a window at the unit, before receiving reports of a fire.
9News understands the man is alleged to have intended to target his former partner, who has now lost everything.
The woman bought the home last year and only moved in months ago.
Her beloved cat managed to survive.
Fire Rescue Victoria (FRV) Commander Craig Williams said crews contained the fire to one unit and it was brought under control within 20 minutes.
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“FRV crews were on scene quickly and this was an extensive fire, it took some time to extinguish… bringing significant damage,” he said.
Peter Olivieri, who lives near the property, said he heard a “loud bang” which woke him up about 4am.
“Within minutes I heard sirens and walked out and could see the flames,” he said.
“It was violent, the flames were really high.
“I have never seen a house fire like it.”
Police and fire crews remain on the scene and investigations are continuing.