We present a compact optical head design for wide-range and low noise displacement sensing using deep frequency modulation interferometry. 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 vacuum, which leads to the generation of ghost beams that can limit the phase readout linearity. We investigate the coupling of these beams into the non-linear phase readout scheme of DFMI and demonstrate adjustments of the phase estimation algorithm to reduce this effect. This is done through a combination of balanced detection and the inherent orthogonality of beat signals with different relative time-delays in deep frequency modulation interferometry that is a unique feature not available for heterodyne, quadrature or homodyne interferometry.