Furnace Replacement Cost
Furnace replacement costs $2,500-$7,500 for most homes, including installation. Gas furnaces are most common at $3,000-$6,000 installed, while high-efficiency models run $4,500-$10,000. Electric furnaces cost less upfront but more to operate.
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Cost Breakdown
| Component | Low | High |
|---|---|---|
| Parts | $1,500 | $6,000 |
| Labor | $1,000 | $3,500 |
| Total | $2,500 | $9,500 |
| DIY (parts only) | $1,500 | $5,000 |
Understanding Furnace Replacement
A furnace is the heart of your home's heating system, providing warmth by burning fuel (gas, oil) or using electricity to heat air that's distributed through ductwork. Understanding furnace replacement cost helps you prepare for this major home expense and choose the right system for your needs.
Modern furnaces are significantly more efficient than units from 20-30 years ago. Replacing an old 60-70% efficient furnace with a 95% efficient model can substantially reduce your heating bills while improving comfort.
Furnace Types and Costs
Gas Furnaces (Most Common)
Standard Efficiency (80% AFUE): $2,500-$5,000 installed
- Uses natural gas or propane
- Vents through chimney
- Most affordable option
- Good for moderate climates
High-Efficiency (90-95% AFUE): $4,000-$7,000 installed
- Uses secondary heat exchanger
- Vents through PVC pipe (no chimney needed)
- 15-20% fuel savings vs standard
- Best value for cold climates
Premium Efficiency (96%+ AFUE): $5,000-$9,000 installed
- Maximum efficiency available
- Variable-speed blower for comfort
- Modulating gas valve for precise heating
- Quietest operation
Electric Furnaces
Cost: $1,800-$4,000 installed
Pros:
- Lower upfront cost
- No combustion risks
- Longer lifespan (20-30 years)
- Simpler installation
- 100% efficient at point of use
Cons:
- Higher operating costs
- Electricity rates often higher than gas
- May require electrical panel upgrade
- Less effective in extreme cold
Best for: Mild climates, homes without gas service, supplemental heating.
Oil Furnaces
Cost: $4,000-$8,000 installed
Pros:
- Burns hotter than gas
- Good for very cold climates
- Available where gas isn't
- Long lifespan with maintenance
Cons:
- Requires on-site fuel storage tank
- Fuel prices fluctuate significantly
- More maintenance required
- Higher environmental impact
Best for: Rural areas without natural gas, homes with existing oil systems.
Furnace Efficiency Ratings Explained
AFUE Ratings
| Rating | Classification | Annual Savings vs 80% |
|---|---|---|
| 80% | Standard | Baseline |
| 90% | High-efficiency | ~12% savings |
| 95% | High-efficiency | ~16% savings |
| 98% | Premium | ~18% savings |
Cost vs Savings Example
For a home spending $1,500/year on heating fuel:
| Furnace Type | Equipment Cost | Annual Fuel | 10-Year Total |
|---|---|---|---|
| 80% AFUE | $3,500 | $1,500 | $18,500 |
| 95% AFUE | $5,500 | $1,260 | $18,100 |
| 98% AFUE | $7,000 | $1,225 | $19,250 |
High-efficiency (95%) often provides best long-term value.
Factors That Affect Furnace Replacement Cost
1. Furnace Size (BTU Output)
Proper sizing is critical for efficiency and comfort:
| Home Size | BTUs Needed | Typical Cost Impact |
|---|---|---|
| 1,000-1,500 sq ft | 40,000-60,000 | Base price |
| 1,500-2,000 sq ft | 60,000-80,000 | +$200-$500 |
| 2,000-2,500 sq ft | 80,000-100,000 | +$400-$800 |
| 2,500-3,500 sq ft | 100,000-140,000 | +$600-$1,200 |
Note: Climate, insulation, and home design affect actual needs.
2. Installation Complexity
Additional factors that increase cost:
| Factor | Added Cost |
|---|---|
| Ductwork modifications | $500-$2,500 |
| New gas line | $500-$1,500 |
| New venting (high-efficiency) | $300-$800 |
| Electrical upgrades | $200-$800 |
| Removing old equipment | $100-$300 |
| Difficult access (attic, crawl space) | $200-$500 |
3. Brand and Quality
| Tier | Brands | Price Range | Warranty |
|---|---|---|---|
| Economy | Goodman, Payne | $1,500-$2,500 | 5-10 years |
| Mid-range | Trane, Carrier, Lennox | $2,500-$4,500 | 10-20 years |
| Premium | American Standard, Bryant | $3,500-$6,000 | 10-lifetime |
4. Labor Rates by Region
| Area Type | Hourly Rate | Typical Installation |
|---|---|---|
| Rural | $50-$75/hr | $800-$1,500 |
| Suburban | $75-$100/hr | $1,200-$2,200 |
| Urban | $100-$150/hr | $1,500-$3,000 |
Furnace Replacement Cost by State
| State | Gas Furnace (80%) | Gas Furnace (95%) |
|---|---|---|
| California | $3,500-$6,500 | $5,000-$9,000 |
| Texas | $2,800-$5,500 | $4,000-$7,500 |
| Florida | $2,500-$5,000 | $3,500-$7,000 |
| New York | $3,500-$7,000 | $5,500-$10,000 |
| Pennsylvania | $3,000-$5,500 | $4,500-$8,000 |
| Illinois | $3,000-$6,000 | $4,500-$8,500 |
| Ohio | $2,800-$5,500 | $4,000-$8,000 |
| Minnesota | $3,200-$6,000 | $4,800-$9,000 |
| Colorado | $3,000-$5,800 | $4,500-$8,500 |
| Michigan | $3,000-$5,800 | $4,500-$8,500 |
Higher costs in cold climates reflect larger furnace requirements.
Single-Stage vs Two-Stage vs Modulating
Single-Stage Furnaces
How it works: On or off—100% output when running.
Cost: $2,500-$5,000 installed
Pros:
- Lowest upfront cost
- Simple, reliable operation
- Easy to repair
Cons:
- Temperature swings
- Less efficient
- Louder operation
Two-Stage Furnaces
How it works: Low (65-70%) and high (100%) settings.
Cost: $3,500-$6,500 installed
Pros:
- More even temperatures
- Improved efficiency
- Quieter than single-stage
- Longer run cycles at low setting
Cons:
- Higher upfront cost
- Slightly more complex
Modulating Furnaces
How it works: Adjusts output from 40-100% in small increments.
Cost: $5,000-$9,000 installed
Pros:
- Most consistent comfort
- Highest efficiency possible
- Quietest operation
- Best humidity control
Cons:
- Highest upfront cost
- More complex repairs
- Best with zoned systems
Signs You Need Furnace Replacement
Replace Immediately
- Cracked heat exchanger (carbon monoxide risk)
- Yellow or flickering flame (combustion problem)
- Furnace won't heat despite repairs
- Burning smell or unusual odors
Replace Soon (Within 1-2 Years)
- Furnace is 15-20+ years old
- Frequent breakdowns (2+ per year)
- Energy bills increasing significantly
- Uneven heating throughout home
- Excessive dust or poor air quality
- Loud or unusual noises
Consider Repair First
- Minor component failures
- Ignitor or flame sensor issues
- Blower motor problems
- Thermostat issues
- Ductwork problems
The Furnace Replacement Process
What to Expect
1. Assessment (1-2 hours)
- HVAC technician evaluates current system
- Performs load calculation for sizing
- Discusses efficiency options
- Provides written quote
2. Day of Installation (4-8 hours)
- Disconnect and remove old furnace
- Install new furnace and connect gas/electrical
- Update venting if needed
- Connect to ductwork
- Install new thermostat (if included)
3. Testing and Commissioning (1-2 hours)
- Test combustion and safety controls
- Measure airflow and temperature rise
- Verify thermostat operation
- Review operation with homeowner
4. Inspection (Scheduled Separately)
- Municipality inspector verifies code compliance
- Tests gas connections and venting
- Ensures permits are properly closed
How to Save on Furnace Replacement
1. Get Multiple Quotes
Get at least 3 quotes from licensed HVAC contractors. Compare equipment, warranty, and installation details—not just price.
2. Shop Off-Season
Late spring and early fall (when HVAC companies are less busy) often offer better pricing and faster scheduling.
3. Claim Available Rebates
- Federal tax credits for high-efficiency systems (up to $600)
- Utility company rebates ($200-$500 common)
- State energy efficiency programs
- Manufacturer rebates
4. Consider Package Deals
Replacing furnace and AC together often provides better pricing than separate installations.
5. Choose Right-Size Efficiency
In mild climates, 80% AFUE may be sufficient. Don't over-buy efficiency you won't recoup in savings.
6. Finance Wisely
Many HVAC companies offer 0% financing. Compare total cost including any financing fees vs cash discount.
Choosing an HVAC Contractor
What to Look For
- Licensed for HVAC work in your state
- Insured (liability and workers' comp)
- Good reviews and references
- Offers written estimates
- Pulls required permits
- NATE-certified technicians
- Manufacturer certifications
Red Flags
- Much lower price than competitors
- Reluctance to provide references
- No license or insurance documentation
- Won't pull permits
- Pressure to decide immediately
- Cash-only requests
Questions to Ask
- "What size furnace do you recommend and why?"
- "What efficiency level makes sense for my home?"
- "Is ductwork modification needed?"
- "What warranty coverage is included?"
- "Do you handle permits and inspections?"
- "What brands do you install and recommend?"
Conclusion
Furnace replacement cost typically ranges from $2,500 to $7,500 for most homes, with high-efficiency models at the upper end. While this represents a significant investment, a new furnace can reduce heating costs by 20-30% compared to an old, inefficient unit.
Key considerations when replacing your furnace include proper sizing (too small or large both cause problems), efficiency level appropriate for your climate and usage, and choosing a qualified contractor who pulls permits and guarantees their work.
Don't delay replacement if your furnace shows signs of failure—especially heat exchanger problems that pose carbon monoxide risks. Schedule annual maintenance on your new furnace to maximize its lifespan and efficiency.
Cost by Vehicle Type
| Vehicle Type | Parts | Labor | Total |
|---|---|---|---|
| Standard Gas Furnace (80% AFUE) | $1,500-$3,000 | $1,000-$2,000 | $2,500-$5,000 |
| High-Efficiency Gas (90-95% AFUE) | $2,500-$4,500 | $1,500-$2,500 | $4,000-$7,000 |
| Premium Gas (96%+ AFUE) | $3,500-$6,000 | $1,500-$3,000 | $5,000-$9,000 |
| Electric Furnace | $1,000-$2,500 | $800-$1,500 | $1,800-$4,000 |
| Oil Furnace | $2,500-$5,000 | $1,500-$3,000 | $4,000-$8,000 |
| Dual-Fuel/Hybrid System | $4,000-$8,000 | $2,000-$4,000 | $6,000-$12,000 |