Arriving in 10 trucks, the Boko Haram fighters stormed the village of Gasarwa near the garrison town of Monguno late Friday, setting homes on fire.
"Five people were killed in the arson, they included two elderly men and three children," Babakura Kolo, a militia leader in the Borno state capital Maiduguri said.
Militia defending the village said they were outnumbered and outgunned.
Militia member Ibrahim Liman said the Boko Haram attackers watched food supplies and livestock burn in the fire but made no attempt to loot.
It was not clear which Boko Haram faction was behind the attacks, but jihadists loyal to IS-affiliated Abu Mus'ab Al-Barnawi are known to operate in the area.
Boko Haram has intensified its armed campaign in recent weeks, especially against military targets in which dozens of troops were believed to have been killed or gone missing.
At the end of July, a group of jihadists in five trucks sacked a military post in nearby Bunari village, with a military source claiming 11 troops were killed.
The attacks appear to undermine repeated claims by the military that Boko Haram had been defeated.