How Much Does It Cost to Replace a Furnace?

A furnace is a must-have heating system for many homeowners. With proper maintenance, most furnaces last more than 15 years. However, malfunctions, user error, and harsh weather can hasten the need to replace your furnace sooner.

Signs that it’s time to replace a furnace include a considerable increase in energy bills, uneven heating across your home, strange noises from the furnace, and humidity problems. So when the time comes, how much should you prepare to pay to replace a furnace?

Adam Graham, construction industry analyst at Fixr.com, says a furnace replacement usually costs between $2,300 and $4,400, with most people currently paying around $3,200.

However, the final cost varies depending on many factors, and homeowners may incur additional expenses if they are required to get a permit or replace ductwork or gas lines before replacing the furnace.

Average Cost of Furnace Replacement

“Replacing a furnace is going to cost a few thousand dollars. In some cases, it may be closer to $1,200, and in other cases, it can be upward of $10,000. On average, most people end up paying somewhere between $2,500 and $7,000,” says Seamus Nally, CEO of TurboTenant.

The lower ranges are based on the assumption that the ductwork or fuel lines are already in place and don’t need to be replaced. However, costs vary considerably if a homeowner changes the type of furnace previously installed or requires the installation of new ductwork, fuel tanks, or fuel lines.

Factors That Impact the Cost of Replacing a Furnace

Factors that affect the final cost of replacing a furnace include the type of furnace, the size of the home, the energy efficiency of the unit, and the labor cost for installation.

Type of Furnace

The main types of furnaces are electric, natural gas, propane, and oil. Even though these all heat a home, they are powered differently and have different pros and cons. Nally says, “The fuel source will impact the source—with gas furnaces being more expensive.”

“An electrical furnace is usually the most affordable fuel source. Oil, natural gas, and propane can be more costly,” Graham concurs.

If you only replace the furnace, the cost is lower. However, if you change the type of furnace, the cost will be much higher to replace essential components or remove prior equipment, like underground oil tanks and old fuel lines. The cost varies based on the furnace type.

Average Cost by Furnace Type

• Electric: $612–$2,247
• Natural gas: $888–$3,670
• Propane: $1,008–$1,876
• Oil: $1,080–$3,200

Home Size

The size of your home determines the capacity of your furnace—the larger the square footage, the larger the furnace. The capacity of furnaces is measured in British thermal units (BTUs). You can roughly estimate the BTUs needed for your space by multiplying the square footage by 40.

For example, if the square footage of your space is 2,000, you need a furnace with about 80,000 BTUs. Homes in extremely cold winters may warrant higher BTUs per square foot. The BTUs affect the cost of replacing the furnace.

Average Cost by Furnace Capacity

• 60,000–100,000 BTUs: $2,400–$4,000
• 90,000–150,000 BTUs: $3,600–$6,000
• 120,000–240,000 BTUs: $4,800–$8,000
• 150,000–300,000 BTUs: $6,000–$10,000

Energy Efficiency

While electric furnaces are cheaper, they may drive up electricity costs, especially during freezing winters. They are better in areas that experience mild winters. High-efficiency natural gas furnaces are an excellent choice for areas that experience freezing winters. They cost more but offer savings in lower utility bills.

Furnace efficiency is rated by the Annualized Fuel Utilization Efficiency (AFUE) ratio, which measures the percentage of heat produced per dollar of fuel used. The higher the AFUE rating, the lower the energy costs.

Labor

Labor costs tend to vary by location. Graham says, “Prices can vary depending on where you live because of the labor charges, which usually vary between $86 to $161 per hour. Replacing a furnace typically takes around 10 hours, but it can take longer if you’re installing new ducts and vents or a new fuel tank. If your furnace is located in an area of the home that’s a bit tricky to access, the installation can take longer and therefore increase the costs.”

Nally suggests shopping around before selecting a contractor.

Ways to Save on Furnace Replacement Costs

The brand of furnace you choose influences the price. High-end brands tend to cost more than mid-range or budget-friendly ones. Do your research and compare prices and features to see if there’s more value with big-name brands. You may want to search for sales, especially Black Friday and Cyber Monday deals. Even during peak season, you may be able to nab deals, coupons, and rebates from sellers and suppliers.

Also, you may be eligible for tax rebates on eco-friendly furnaces. “Go for an Energy Star-rated furnace. These are high-efficiency models that use less energy, which can save you some money on your monthly bills. Look for any tax credits or rebates in your area. You might be able to find something that can offset the upfront costs of the installation,” says Graham.

Don’t Cut Corners

While DIY projects seem attractive because of the potential savings, hiring a professional to replace a furnace is recommended. Talk to your neighbors, read online customer reviews, get quotes from multiple companies, and check their licenses and insurance before deciding on the right contractor for you.