The average cost of a new furnace in the U.S. is about $4,800, according to HomeAdvisor.com, with a range from about $2,900 to $6,900. When you need a new furnace during the winter months, you typically won’t have much time to price compare. In cold weather, being without a functioning furnace can be dangerous and potentially lead to water damage from pipes bursting. But you don’t want to overpay for your furnace replacement, either.
Purchasing a furnace during the warmer months can be the best time, when prices are likely lower and when you don’t need to make a quick, panicked decision because it’s freezing outside.
If your furnace has been having repeated issues or is nearing the end of its projected life span, be proactive by researching your cost options now.
To help you understand how the total cost of your furnace replacement adds up, here we’ll break down the details, including the furnace itself, labor and other additional costs for installation and how to keep your new furnace running smoothly.
[READ: 10 Ways to Save Energy and Lower Utility Bills]
How Much Does a Furnace Cost?
Factors that influence the price of a new furnace include the materials used in its construction, the type of equipment it is and the labor required for installation. Prices depend on whether you have a gas, electric or oil furnace. Electric furnace installation tends to be the least expensive, ranging from about $2,000 to $7,000, according to HomeAdvisor. Installing a natural gas furnace typically falls in the range of $3,800 to $10,000, while an oil furnace installation costs about $6,750 to $10,000.
It is possible to change the type of furnace you have, or even to a different type of system like a heat pump, which typically requires less energy to heat through electricity and is considered more environmentally friendly (more on that below).
Furnace sizes are based on the measurement of British thermal units (Btu), which is the amount of energy required to increase the temperature of a pound of water by 1 degree Fahrenheit.
To figure out how many Btu your furnace should have to heat your home, you need to know its square footage and which of the U.S. climate zones you live in. Once you determine those factors, you can find many Btu calculators online that will help you determine your furnace size. Many also have a climate zone map to help you determine the zone you’re in for a more precise determination.
As an example, a 2,000-square-foot home with newer windows in Zone 4 — which cuts across the middle of the country, with spotty areas in the West — would likely need a furnace with 80,000 to 90,000 Btu. The price of that furnace size varies widely depending on brand and distributor but ranges between about $1,300 and $5,000 for a stand-alone furnace from retailers like Lowe’s, Walmart and Amazon.
If you have a home warranty with systems coverage, that may help pay for at least part of a furnace repair or replacement.
“I always recommend choosing modern high-efficiency models with an AFUE rating of 95% and above,” says Jason Altshuler, CEO of My Electric Home, a home electrification services company in Centennial, Colorado. AFUE, which stands for annual fuel utilization efficiency, measures how well a furnace converts fuel into energy.
“These allow you to significantly reduce energy costs because nearly all the energy goes toward heating rather than being wasted,” Altshuler says. “However, choosing a new furnace shouldn’t be based only on brand or price.”
Importance of Choosing the Correct Furnace Size
Altshuler says that “one of the most common misconceptions is that more power means better performance. In practice this often causes an oversized furnace to cycle on and off frequently before it can reach its optimal operating temperature,” he adds. “This is called short cycling and it results not just in a loss of efficiency but also in faster wear on the equipment.”
But don’t get a furnace that’s too small, he cautions. In that case, “the system will run constantly and still struggle to keep the home warm.”
To ensure you’re getting the correct size furnace for your home, a reputable HVAC contractor will perform a Manual J load calculation, an HVAC-industry standard process from the Air Conditioning Contractors of America. It takes into account factors like a home’s windows and doors, home orientation and floor plan, home insulation, supplemental heat sources, quality of ductwork and climate zone to determine the proper sized furnace.
[What Is Radiant Heat? Pros, Cons and Costs (2023)]
How Much Does Furnace Replacement Cost?
Aside from the furnace itself, a few factors contribute to the total cost of getting a furnace system up and running. Here’s what to keep in mind:
Labor
You’ll typically pay $75 to $100 an hour to have a home furnace installed, according to home improvement website Angi. Of course, this number goes up or down for a variety of reasons — location and availability of skilled laborers to do the work, as well as the time of year and current demand for furnace installation.
Old Furnace Removal
How accessible is your furnace? System removal can be simple or complicated and is often a part of the package for new furnace installation. When you get estimates from contractors, be sure this is part of the total cost — including disposing of the old unit.
Venting and Ductwork
If you need to change your existing venting, that could drive up the cost of a furnace installation.
Similarly, old or undersized ductwork may need to be replaced to ensure a new furnace functions properly and efficiently. HomeWyse, a home improvement project information company, estimates it will cost about $16 to $23 per linear foot to install ductwork. In total, ductwork installation can add from about $2,000 to $7,500 on average to a furnace system replacement, according to Angi.
Checking and replacing ductwork “often gets overlooked, but leaks and blockages in the ductwork can waste 30% or more of the heat,” says Altshuler.
Local Permits
Many parts of the country require permits to install new furnaces, and these typically come with a small cost. Many HVAC professionals will take care of this part of the process for you, but be sure to check what your local municipality or county requires and verify the contractor will be handling this.
Insulation and Windows
The energy efficiency of your home plays a role in determining the best type of furnace for it, so you may want to first improve this to reduce heating costs throughout the winter. New insulation and windows in an older home can slash the amount of heat escaping in cold weather, so your furnace doesn’t have to work as hard. If you can’t afford to replace windows, add weatherstripping to reduce air leakage.
Timing Matters
As noted, you’ll likely get a better deal on a furnace during the warmer months. “Off-season, like spring or early fall, is the best time to get the lowest pricing and better installer availability,” says Glenn Gault, CEO of Gault Heating & Cooling in Hubbard, Ohio. “An even smarter way will be buying a furnace in late spring and installing it in early fall,” he says, explaining that buying and installing in the same off-season window limits your leverage. “Stagger it to get the best deal and lock in pricing before fall demand spikes.”
Negotiate Extras
“Negotiate add-ons, not discounts,” Gault adds. “Most contractors won’t budge much on price, but you can often get extras thrown in, like a better thermostat, duct sealing or upgraded filter cabinet, for free if you ask after the initial bid.”
Gault also advises to ask about “what doesn’t come standard. Some installers charge extra for things that should be included, like new flue piping or code upgrades,” he says. “Knowing what’s optional helps you spot shady bids. That’s why you always should ask for all-in quotes. Insist on itemized bids that include ductwork tweaks, disposal, permits and labor, so you don’t get nickel-and-dimed later.”
Don’t Get Hung Up on Brand
“Skip the brand obsession; a lesser-known furnace with solid specs and a quality install often outperforms a premium brand done poorly,” Gault says. “Focus on fit, not just efficiency. An oversized furnace wastes energy and money. Have your contractor do a proper load calculation.”
Think About Incentives
“Don’t forget about utility rebates and tax credits,” Gault says. “Check DSIREusa.org or ask your installer what incentives apply to your region.”
Avoid Scam Artists
“Never agree to same-day install if you just met the contractor,” advises Gualt. “Quick turnaround is great, but if someone pushes you to sign today with no time to compare or read the fine print, walk away.”
A same-day install offer isn’t necessarily a sign that you’re working with someone shady, but you should take the time to ensure the contractor is reputable.
Be Aware of Potential Extra Costs
With any home improvement project, you’ll likely see extra, hidden costs. A few that could come with replacing a furnace include:
— Possible upgrades to your home. You may need to have alterations on venting or ductwork before a new furnace is installed. Contractors also may need to repair gas lines, shutoff valves or electrical lines.
— You may decide to upgrade your furnace. If you decide to get a more expensive furnace model, the up-front cost will be higher, but the long-term savings may make up for that. You may also think it’s worth it since they often run quieter and balance humidity, making your home potentially far more comfortable.
— Possible repairs or changes to your home. If you remove an old furnace, it could affect some other part of your home, such as your chimney. A competent professional should be able to warn you of this so you can make a more informed decision on replacing your furnace.
— Thermostat replacement. Upgrading your furnace is a good time to think about replacing your thermostat with a smart model for better energy efficiency.
[Read: How Much Do Energy-Efficient Windows Cost?]
How to Keep New Furnace Maintenance Costs Down
It’s vital you change your furnace’s air filter regularly — between every 30 and 90 days. If you have pets that shed or live in a dusty or high-pollen region, you may want to change it closer to every 30 days.
HVAC experts say you should also have your furnace serviced by a professional once a year to ensure parts are clean and it’s working properly. Ideally, request service before you plan to turn on the heat regularly for the year (the same is true for air conditioning systems). In addition, if you have HVAC coverage with a home warranty plan, you may need to show a maintenance record when submitting a claim.
Of course, if you suddenly notice higher-than-usual electric or gas bills (and local friends and neighbors aren’t experiencing this), it’s a good idea to have a professional take a look at it.
If you need to replace your furnace and your central air conditioning system is nearing its typical life span, you may want to discuss replacing it as well with your HVAC professional. You may spend more money up front, but the overall system installation may be cheaper than if you replaced them at separate times. Plus, you could then have both the furnace and air conditioning system under the same warranty.
Furnaces vs. Heat Pumps
If you want to look into changing your heating system from a furnace to a heat pump, you’ll typically find it’s more energy efficient, but the initial cost will likely be more than a furnace replacement.
According to heat pump manufacturers like Carrier and Bryant, heat pump installation cost can vary widely, from about $6,000 to $25,000, depending on whether you’re replacing an existing unit, the condition of existing ductwork and electrical system and the type of heat pump system (geothermal, or ground-source, systems are typically pricier to install).
Should you switch to a heat pump? Here are some pros and cons you’ll want to consider.
| Pros of a heat pump | Cons of a heat pump |
| It’s energy efficient, absorbing heat from the air outside and bringing it inside. | Purchasing and installing a heat pump can be expensive. |
| Many homes with ductwork for forced-air systems can be adapted to work with heat pumps. | They often don’t work as well in drafty homes. Your home should be well insulated to make this a practical option. |
| Heat pumps can also heat water. | Heat pumps are most suited for milder climates since they aren’t as efficient in very cold temperatures. |
| It may bring down your energy costs because of its energy efficiency, but these savings may take time to be realized. | Heat pumps can be difficult to install, so you’ll likely need professional assistance. |
Compare the Best Home Warranty Companies
More from U.S. News
12 Home Improvements That Don’t Add Value
Here’s Why You Shouldn’t Skip Out on a Home Inspection for New Construction
4 Things You Should Check In Your Air Conditioning Before Summer Heats Up
Furnace Replacement: How Much a New Furnace Costs originally appeared on usnews.com
Update 06/23/26: This story was published at an earlier date and has been updated with new information.
