Fire crews battle out of control blaze in Sydney's west

Firefighters have stabilised a bushfire in western Sydney that yesterday threatened homes.

Authorities were forced to evacuate residents living near a bushfire blazing out of control at Mulgoa in Sydney's west.

But last night the NSW Rural Fire Service downgraded the threat level from "watch and act" to "advice" on Sunday evening.

Just as Christmas Eve celebrations kicked off, residents of Mayfair Rd were told to leave their homes as firefighters moved in to protect their properties.

The flames were intensified by strong winds moving near Penrith, quickly turning the fire from minor to dangerous.

NSW Rural Fire Service spokesman Larry Bagnell told 9NEWS the focus was on saving homes.

"We've had fire impacting two houses up the road there, we've saved those, it's the good news," he said.

The fire took local residents by surprise, with one man telling 9NEWS "it just came out of nowhere.

"My son said 'oh, it's a bit smoky outside, I don't know why'," the resident said.

"So he came out the front and it's jumped across the top of our house and gone behind the house."

According to the latest update, the fire has moved towards the Nepean River.

The fire was spurred on by a heatwave moving through Sydney, with temperatures of more than 40 degrees cutting power to 3000 homes in suburbs like Wiley Park, Lakemba and Punchbowl.