Chris and Pat Lockley say they are ‘lucky to be alive’ after the blaze in Chapel Lane on December 22.
They were asleep when Mr Lockley says he was suddenly woken by the smell of smoke just before 7am.
He told the News: “I opened my eyes and there were flames up the side of the bed...thick smoke all over the place.
“All I could think was...’bloody hell. we’ve got to get out of here.’
“I yelled at Pat. She woke up and somehow we got downstairs and out into the garden.”
Mrs Lockley phoned 999 and crews from Horncastle, Spilsby, Louth and Boston were quickly on the scene.
In the meantime, Mr Lockley attempted to get back into the house to rescue their dog ‘Fudge.’
Mr Lockley explained: “Pat didn’t want me to go back in but you don’t think straight. Adrenalin takes over.
“I tried to get back (in) and look for ‘Fudge’ but the smoke was too thick.”
Mrs Lockley says she was ‘scared to death’ when her husband returned to the house.
She said: “When he came back out, his face was black and all his hair was all singed.
“He was coughing, struggling to breath.
“There was nothing we could do.”
Firecrews used breathing apparatus and an aerial ladder platform to put out the blaze before it could spread to an adjoining property.
There was a happy outcome for ‘Fudge’ who Mr and Mrs Lockley feared had died.
Mrs Lockley explained: “She’s only a little dog and when anything scares her, she races up the stairs and lays on the landing.
“That’s where one of the fireman called Barney found her.
“Because she was laid on the floor, the smoke had gone just over her head.
“I couldn’t believe it when Barney brought her out.
“I’ll never be able to thank him enough.”
Most of the couple’s furniture was damaged and they lost all their clothes and Christmas presents. Fire and smoke destroyed the first floor of the property while the ground floor suffered extensive water damage.
Mr Lockley was treated at the scene for smoke inhalation.
They are, though, happy to be alive. Mrs Lockley added: “People were coming up to us, wishing us happy Christmas and then saying that didn’t sound right.
“I told them why not? It is a happy Christmas because we are still alive. One of the firemen told a neighbour that if we’d been in the house for another two minutes, we’d never have got out.
As news of the blaze spread, friends and neighbours set up a funding page.
Hundreds of pounds have been pledged.
The couple spent Christmas at a neighbour’s house and are now staying in a holiday cottage.
Mrs Lockley said: ”We can’t thank everyone enough - people like Maggie and Stan and Jo and the kids.
“We’ve been blown away by the response. The community has been absolutely fantastic.
“We’ve had people we don’t even know dropping off bags of clothes and all sorts of offers of help.
“Please, could you just say thank you to everyone.”
The couple have lived in the house - previously owned by Mr Lockley’s dad - for eight years and were in the process of renovating it.
Mrs Lockley added: “It was always our dream home.
“We’d done a lot of work but a lot still needed doing.
“Now, we’re going to have to start all over again.
“The place is a mess but it’s still our home, our dream home and we wouldn’t want to live anywhere else.”