Cole Mackenzie (17) was upstairs and alone in the family home when a smoke detector alerted him to a fire in the downstairs hot water cupboard.
"I came downstairs and there was black smoke everywhere," he said.
The forestry worker rushed next door to his neighbour's house - the local fire chief's home - to raise the alarm and grab a CO2 fire extinguisher.
He was confronted by dense smoke and flames beginning to lick from underneath the cupboard doors when he returned to the house.
"I probably shouldn't have gone back in. The smoke was heaps worse. I just sprayed it [the extinguisher] everywhere," Cole said.
Fire Safety inspector Stuart Ide, of Queenstown, said the teenager's actions had definitely helped limit the fire damage, but he warned against people trying to fight fires by themselves.
"We don't encourage people to go back into burning properties. It is best to get out of there as quick as possible."
The Lake Hawea Fire Brigade arrived shortly afterwards to fully extinguish the blaze.
Cole was treated for smoke inhalation after the incident by paramedics.
The fire had started from a short-circuit fault in the electrical wiring of a hot water cylinder, Mr Ide said.
Modern building materials had also helped mitigate the fire and smoke damage.
Fire-resistant treated gib board had "largely" contained the blaze, Mr Ide said.
Intense heat from the smoke and flames melted the smoke detector which had alerted Cole to the blaze. It was located next to the downstairs cupboard.
The house and contents were fully insured.
Cole's father, Lyndon Mackenzie, said his son's actions had helped save the family home.
