The cost of a new furnace ranges between $1,600 and $10,000, including installation. This wide cost range is due to the variety of furnace types available. Electric furnaces are typically the cheapest type, while gas and oil furnaces are more expensive. Labor also plays a role in how much you’ll pay for furnace installation.
We researched the most common furnace costs and created a guide explaining how different types of furnaces work, how much they cost, and pricing factors to consider before buying a new one. You can also check out our recommended furnace brands to see which ones best suit your home.
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Cost data in this article was sourced from HomeAdvisor unless otherwise specified.
General Furnace Costs
Our research shows that the average cost of a furnace is $4,799, depending on several factors, such as fuel type and size. The table below shows the unit costs of each type of furnace. Note that prices can vary based on your location and the size of your home. We recommend requesting quotes from a furnace brand for accurate pricing.
| Furnace Type | Unit Cost |
|---|---|
| Electric | $2,000–$7,000 |
| Gas | $3,800–$10,000 |
| Oil | $6,750–$10,000 |
Cost figures are from HomeAdvisor.
What Factors Affect Furnace Costs?
As mentioned above, furnace costs typically vary based on several factors, including size, energy efficiency, fuel type, installation costs, and brand. We discuss each cost factor separately in the sections below.
Fuel Type
The biggest factor affecting furnace costs is the fuel type the furnace uses. Electric furnaces are the most cost-effective because they have simpler internal systems compared to their gas and oil counterparts. Natural gas and oil furnaces have additional internal components and maintenance requirements, making them a pricier option. Some furnaces use alternative fuel types, such as firewood and propane. These varieties may suit you if you live in off-the-grid areas.
Energy Efficiency
You’ll often see furnace efficiency described by a rating called AFUE (annual fuel utilization efficiency). A higher AFUE rating means the furnace converts more of the energy it consumes into heat for your home, which can lower your energy bills. These high-efficiency models— which the United States Department of Energy says have a 90% AFUE rating or higher—cost more upfront, but they save you money over time by using less fuel or electricity. If you live in a cold climate, investing in a high-efficiency furnace might make more sense than if you live in a milder area.
Furnace Size
The size of the furnace you need depends on your home’s size and layout. Manufacturers measure the size of a furnace in British thermal units (Btu). A furnace that’s too small will struggle to heat your home effectively, while one that’s too large can waste energy and money. HVAC professionals calculate the right size by performing a load calculation, which factors in your home’s square footage, insulation, windows, and climate. Larger, more powerful furnaces generally cost more than smaller ones.
Furnace sizes usually range from 40,000–120,000 Btu. In general, you can calculate the Btu for your house by multiplying the total square footage by 40, with colder areas needing slightly more Btu per square foot.
What Are Additional Furnace Costs?
Like most home improvement projects, installing a new furnace has additional costs. For example, your local climate will determine the furnace capacity you buy, which affects the total cost of the project. We outline several additional cost factors to keep in mind when installing a furnace heating system.
Local Climate
Where you live plays a role in the type of furnace you need and how much it costs to operate. In colder climates, you’ll likely need a more powerful and efficient furnace, which can be pricier. On the other hand, if you live in a warmer area, a smaller, less expensive furnace may suffice. Local energy prices—for gas or electricity—also influence the overall operating costs of your furnace.
Installation
The cost of installing your furnace depends on its complexity. If your home already has the necessary ductwork and connections, the installation may be straightforward and less expensive. However, if you need new ductwork, venting, or electrical upgrades, these can significantly increase the total cost. Labor costs also vary depending on your location and the contractor you hire.
Brand
Like most home systems, furnace costs can vary significantly depending on the brand and features you choose. Well-known, reputable brands tend to be more expensive because they offer better reliability, warranties, and customer support. Additionally, modern furnaces often come with features like variable-speed blowers, smart thermostats, and advanced filtration systems, which can make your home more comfortable but also add to the price.
What Are Common Types of Furnaces?
There are three main types of furnaces: electric, gas, and oil. Each type has its benefits and drawbacks. For example, while electric furnaces are generally cheaper than other furnace types, you’ll likely pay more to run an electric furnace in terms of energy usage.
Additionally, some types are better suited for colder climates than others. We spoke to Jim Fuson, a home inspector for 21st Century Home Inspections, who said that gas furnaces are better suited for colder climates—such as northeastern states—because they are more effective at heating homes than electrical furnaces.
We detail each type of furnace below:
- Electric: Electric furnaces use heating coils that activate when electricity from your home passes through the unit. Unlike gas and oil furnaces, electric versions are more efficient because they do a better job of converting the electricity into heat. These furnaces are best suited for areas that don’t have severe winters because they don’t produce as much heat as their gas counterparts.
- Firewood: Firewood furnaces are a more eco-friendly option than standard furnaces. While most firewood furnaces require electricity to run their electrical components, the main fuel they use to create heat is firewood.
- Gas: Gas furnaces, such as natural gas and propane furnaces, produce heat using a burner and a heat exchanger. These furnace types have more components than electric furnaces, such as gas valves and flame sensors. In addition, gas furnaces work well in areas with below-freezing temperatures.
- Oil: Similar to a gas furnace, oil furnaces produce heat using a heat exchanger and burner combination to produce heat. These furnace types are also suitable for areas with harsh winter conditions.
How To Save on Furnace Costs
Replacing or installing a furnace can feel like a big expense, but there are ways you can save money without sacrificing comfort or quality. Here are a few ways that can help you cut costs and get the best value for your new furnace:
- Get multiple quotes: Don’t settle for the first price you hear. Contact at least three reputable HVAC contractors in your area to compare prices for new furnace installation. This will give you a better idea of the going rate and ensure you’re not overpaying.
- Choose the right furnace: Don’t buy the most expensive, high-tech furnace unless it’s necessary for your home’s heating needs. For example, if you live in a milder climate, a standard electric furnace will do the job just as well as a more expensive natural gas furnace. Work with a professional to ensure you’re getting the right size and type of furnace for your home.
- Take advantage of rebates and tax credits: Check for rebates from manufacturers, utility companies, or government programs, such as Energy Star’s furnace tax credit, that give you incentives for installing an energy-efficient furnace. These incentives can significantly reduce your overall costs. Many high-efficiency furnaces qualify for these savings, so ask your installer or check online for what’s available in your area.
- Buy during the off-season: Furnace replacement costs tend to be lower during the spring and summer when demand for heating systems is lower. If you can plan ahead, purchasing your furnace during these slower seasons could save you money.
When Should You Repair or Replace Your Furnace?
Deciding whether to repair or replace your furnace largely depends on the age, condition, and efficiency of your unit. While repairs are often the more affordable option in the short term, there are times when replacing your old furnace makes more sense in the long run. We go over the key signs that can help you determine whether to repair or replace your furnace.
Signs You Should Repair Your Furnace
Repairing your furnace may be a better choice for your situation, depending on the condition of your existing furnace and your budget. For example, a repair makes sense if your furnace is still relatively new. Here are some other signs to look for that indicate a repair is needed:
- Low repair cost: As a general rule of thumb, if the repair cost is less than half the price of a new furnace, it’s usually worth repairing. Repairing simple issues, such as replacing a blower motor or fixing a thermostat, is often affordable and can keep your furnace running for years.
- Low energy bills: If your furnace is still running efficiently and your energy bills are consistent, a repair might be all you need. However, spiking energy bills can indicate that your furnace is struggling, which may signal that it’s time for a replacement.
- Minor issues: If your furnace is making strange noises, has a clogged filter, or isn’t heating evenly, these could be minor issues that a professional can fix quickly. Regular maintenance can often prevent these problems from recurring.
Signs You Should Replace Your Furnace
Sometimes, replacing your furnace is the more practical, cost-effective solution. For instance, if your furnace struggles to maintain a consistent temperature inside your home or you’re experiencing frequent breakdowns, it may be time for replacement. Here are other signs to look for:
- Expensive energy bills: Even with regular maintenance, older furnaces lose efficiency over time. If you notice a significant increase in your heating bills, your furnace may be using more energy than it should. Upgrading to a high-efficiency model can save you money on energy costs.
- Old furnace: According to the International Association of Certified Home Inspectors, furnaces typically last 15–25 years. However, as they age, they become less efficient and more prone to breakdowns. If your furnace is nearing the end of its lifespan, it’s often smarter to invest in a new unit rather than pour money into repeated repairs.
- Pricey repair quotes: If repairing your furnace costs more than half the price of a new one—or if it involves expensive components like the heat exchanger or control board—replacement is often the smarter investment. A new furnace comes with a warranty and will save you from more repairs down the road.
- Strange noises or smells: While some noises (like minor rattling) are an easy fix, loud banging, screeching, or grinding sounds can indicate serious internal issues. Similarly, if you smell gas, burning, or anything unusual, it may be a sign of a dangerous problem. In these cases, replacing your furnace might be the safest option.
DIY vs. Professional Furnace Installation
While the associated savings of installing your new furnace yourself may seem tempting, we don’t recommend it for various reasons. For example, some furnace installations require removing your old HVAC system and associated ductwork, which can be difficult to do without professional experience. Some manufacturers require professional installation to keep their manufacturer’s warranty active, which gets nullified if you install it yourself.
Another reason we recommend hiring a professional is that they will know how to correctly install your new furnace without violating local jurisdiction codes. Fuson said you risk breaching these codes if you incorrectly install your new furnace.
Is a New Furnace Worth It?
A new furnace is worth it if your current system is old, inefficient, or struggling to keep your home comfortable. While the upfront cost is a valid concern, the long-term benefits—including energy savings, improved comfort, and fewer repairs—often make it a worthwhile investment. If you’re still unsure, we recommend checking out our list of the best furnace brands to compare options. Each of these brands has professional technicians who can evaluate your current furnace and help you decide whether a replacement is the right choice for your home and budget.
FAQs About Furnace Costs
What is the average cost to replace a furnace?
According to our research, the average cost to replace a furnace is between $1,600 and $10,000. The exact cost depends on several factors, such as furnace type, energy efficiency, and size.
Should I replace a 20-year-old furnace?
We recommend considering replacing a furnace that is 20 years old because it is nearing the end of its lifespan. Most furnaces last between 15 and 25 years, and they tend to start breaking down more often once they are 15 years old. While the upfront replacement costs will be higher than most repairs, you’ll have peace of mind that your system will last for another 15–25 years.
Why is furnace installation so expensive?
Furnace installation is expensive because the system itself costs a significant amount. Our research shows that natural gas furnaces can cost an average of $6,900. Installation also adds significant costs because furnace replacement can take multiple hours and requires professional knowledge of a home’s utility lines and furnace internals.
What are other heating alternatives to furnaces?
Replacing your furnace with a heat pump is the best alternative to heating your home. A heat pump is much more efficient than a furnace and can replace both your heating and cooling systems with one unit. It can also save you money on your energy bills. Heat pumps work best in areas with milder winters, but if you live in a state with consistently low temperatures, you can install a heat pump with a backup furnace for when the temperature drops.
