How Much Does a Furnace Replacement Cost?

Furnace Type

All furnaces work the same at the base, but different fuel types power them. The three most common are electric, natural gas, and oil. The type of furnace you choose depends on how low the temperature dips in your region. 

Electric Furnace

Electric furnace installation costs around $1,600 to $6,900. It’s less common than a gas heat system, and in fact, it’s technically a heat pump or geothermal system in milder parts of the U.S., where winters are relatively warm. An electric furnace moves air around a series of heated coils and then distributes the heated air throughout your home via ducts and vents. Units are sized according to how many kilowatts they consume. While electric furnaces are extremely efficient, they use a lot of electricity. 

Natural Gas Furnace

Gas furnaces average $3,800 to $10,000 to install, but they can cost as much as $12,000. New gas models will save you money because they're more energy efficient, but be prepared to spend more on the front end. High-efficiency models cost 50% to 100% more than standard models. 

According to the American Gas Association, these furnaces are most commonly used in areas with cold, harsh winters because natural gas heat tends to feel warmer than heat produced by alternative sources. For example, natural gas from a forced-air system ranges from 120 to 140 degrees Fahrenheit. Compare that to an electric heat pump, which delivers about 85 to 95 degrees Fahrenheit. 

Oil Furnace

Oil furnaces have been around the longest and cost anywhere from $6,750 to $10,000 or more to install. They're widespread in the Northeast, where there's a lot of oil, but they're more expensive because oil is expensive to import and doesn't have good energy efficiency. There's also more maintenance involved because you need to regularly change the oil filter in your furnace. 

They do have some benefits, though. Compared to gas furnaces, they don't leak carbon monoxide and don't run the risk of explosion. They also last the longest, about five to 10 years longer than gas furnaces.

Furnace Size

You measure the size of a furnace in British thermal units (BTU), and furnace sizes usually range from 40,000 to 120,000 BTUs. So, how do you figure out how big a unit you need? There's a simple equation to get you started. Multiply the total square footage you're looking to heat by 40. For example, a 2,300-square-foot home will need at least 92,000 BTUs. But if you live in a colder area, you may want to budget for more BTUs.

Other considerations include the height of your ceiling since high ones take more BTUs to heat and your home’s overall insulation. If you have leaky windows or doors, you’re losing heat, so you’ll also need more BTUs to keep the place warm. 

Furnace Energy Efficiency

Furnaces with a high-efficiency rating will save you money in the long run, although the units are more expensive to buy. To find the cost savings, multiply your monthly electric bill by the efficiency difference between your old and new furnace. 

For example, if you have a 70% efficiency furnace and replace it with a 97% efficiency model, you'll have a 27% upgrade. Now, multiply that figure by your monthly bill to calculate your average monthly savings. For example, if your monthly bill during the wintertime is usually $200 and your new furnace increases your efficiency by 27%, then you'll save about $54 each month.

Furnace Brand

Consumer Reports offers comparisons between the top furnace brands. Read the table below to determine which furnace type and brand work best for your needs.

According to Energy Star’s list of most efficient appliances, about 30 models on the market have a high energy-efficiency endorsement. Many popular HVAC manufacturers make more than one brand of gas furnaces and separate them into basic, mid-range, and premium categories. 

For example, the premium brand Carrier offers a more budget-friendly brand called Payne. The technology and devices are almost identical, but the warranties aren’t. This is where much of the price difference comes from, with some units offering lifetime coverage.

Furnace Installation 

Installing a new furnace costs anywhere from $2,000 to $10,000 or more. We list the percentage breakdown for a furnace installation project below:

• Unit: 50%–75%

• Labor: 20%–30%

• Equipment, permit, and old furnace removal: 15%–25%

Expect to pay around $50 to $100 for a licensed furnace installer and up to $50 per hour per additional team member. The final labor price will also depend on your current setup and whether you need to repair or install new ductwork.

Furnace Replacement 

Replacing a furnace can cost anywhere from $2,000 to $7,000, depending on your furnace type. Mid-efficiency furnaces vent through a chimney and cost about $1,500 to $2,500 with installation. A high-efficiency furnace costs around $3,000 to $5,000 to install and vents through a PVC pipe in the wall. Here's a breakdown of replacing your furnace by furnace type:

Furnace Removal 

Removing and disposing of a furnace costs around $60 to $500, depending on how hard it is to remove it, the dumping fee in your area, and your distance to the dump site. Your contractor will typically include this fee in their estimate. 

If you're looking for a more eco-friendly solution, some companies will take your old appliance to use its components. There's still a fee, though, and you can expect to pay around $50.

Signs of a Furnace Failure 

Common furnace issues include a clogged air filter, residue buildup on the ignition sensor, and the pilot light being out. If you're having the following problems with your furnace, you might need to replace it: 

• It's more than 15 years old.

• Your energy bills are higher than usual.

• The rooms in your house are heating unevenly.

• The furnace is making strange noises.

• Parts of the furnace are rusted or cracked.

• It's cycling on and off more than usual.

• You start having humidity problems in your home.

Benefits of Replacing an Old Furnace

Replacing an outdated or broken furnace can help you and your family be more comfortable in your house. If you’re unsure about the benefits of replacing an old furnace, here are some reasons why it’s necessary.

• Lower repair costs: A new furnace is less likely to require as many repairs as an older furnace, reducing furnace repair prices. 

• Improved comfort: A new furnace will heat your home more evenly and efficiently.

• Better airflow: A new furnace means better airflow, removing impurities from the air and preventing mold buildup. 

• Less noise: Newer furnaces are less noisy than older ones.

• Reduced carbon footprint: A new furnace can utilize up to one-third less fuel than older models, which means you’ll be using less of the planet’s natural resources.

Additional Cost Factors

You'll also need to consider these variables when replacing or installing a furnace. 

Ductwork

Most furnaces won't work correctly if the ductwork, vents, or various furnace filter types aren't installed or adjusted correctly for the new heating system. Installing ductwork costs an average of $1,500 to $7,000, and repairing ducts costs around $1,000 to $5,000. The total cost to install can vary widely based on factors including but not limited to:

• Number of stories in a house

• Intake or output vents

• Accessibility

• Siding and wall material

• Temperature-control zones

Permits and Inspections

Building permits cost approximately $400 to $1,500, depending on your location, with most places including inspection fees of $100 in the permit price. These ensure that pros operate the equipment safely. Some local gas providers even offer free inspections, so shop around before settling on an inspector.

Tax Credit

You may qualify for a residential energy property credit if you make energy-saving improvements to your residence. According to the Internal Revenue Service, the maximum credit for any qualified natural gas, propane, or oil furnace is about $150. 

DIY vs. Hiring a Furnace Pro

By law, a trained technician has to handle a furnace installation, so don’t think about a DIY job here to save some costs. On average, a local furnace installation pro will spend about 11 hours on the job.