We present a compact optical head design for wide-range and low noise displacement sensing using deep frequency modulation interferometry (DFMI). The on-axis beam topology is realised in a quasi-monolithic component and relies on cube beamsplitters and beam transmission through perpendicular surfaces to keep angular alignment constant when operating in air or in a vacuum, which leads to the generation of ghost beams that can limit the phase readout linearity. We investigated the coupling of these beams into the non-linear phase readout scheme of DFMI and implemented adjustments of the phase estimation algorithm to reduce this effect. This was done through a combination of balanced detection and the inherent orthogonality of beat signals with different relative time-delays in deep frequency modulation interferometry, which is a unique feature not available for heterodyne, quadrature or homodyne interferometry.