How much does a furnace cost?

Cost by type of furnace

There are three popular types of furnaces in the U.S.: gas, electric and oil. Which one works best for your home depends on several factors, including your location, price range and square footage. You can request a free consultation with Home Depot or Lowe’s to pinpoint the fees associated with your particular situation.

Gas furnaces

Most people in the U.S. have gas furnaces. Though the upfront payment for a gas furnace tends to be more expensive than for some other types of furnaces, the fuel efficiency cuts costs in the long run (especially compared with oil furnaces). You can expect to pay $1,700 to $9,700 to install a gas furnace.

“Gas furnaces are typically warmer than electric ones. But electric furnaces are 100% efficient, versus the maximum 90% efficiency gas furnaces offer,” said Dariush Jamasb, owner of Air One Tech, an HVAC contractor in northern Virginia. “Apples to apples, gas furnaces also last longer than electric ones.”

Electric furnaces

If you’re searching for environmentally friendly utilities, electric furnaces are the way to go. Because they don’t require burning fuel, they’re a cleaner energy option than gas and oil equivalents. At $1,600 to $6,200 including installation, many electric furnaces are also cost-effective. Electric furnaces can be spendy to run, though, and the costs can add up over time in particularly cold areas.

Oil furnaces

An increasingly less common option, oil furnaces are considered outdated due to lower efficiency ratings and more expensive installation costs. If your home isn’t connected to natural gas and you live in a cooler region, an oil furnace may be one of your only options, however. The upfront payment for an oil furnace generally lands between $4,300 and $9,200.

A new furnace (especially if it’s oil-fueled) can get pretty expensive, especially including installation, but if you have a home warranty with HVAC coverage, you might be in luck. Check your terms to find out if you’ve covered.

A reviewer from Pennsylvania we spoke with on the phone explained being happy with their warranty coverage for their furnace and drain: “Because if I had just called a plumber or a heater person to come out, it would have cost me substantially and probably more than what the annual cost of the service is.”

» MORE: What does a home warranty cover?

Furnace cost factors

Jamasb, from Air One Tech, told us, “The cost of your furnace depends on brand, efficiency, features — like variable-speed motors — and the size — as in, capacity — which is measured in [British thermal units].”

Efficiency

Annual fuel utilization efficiency (AFUE) is a measure of how efficient a furnace is at converting energy into heat. High-efficiency heating systems have an AFUE between 90% and 98.5%, according to the Department of Energy.

Ultimately, the number will affect your monthly bill. Don’t forget to factor in your climate; if you live in a frigid zone, you’ll likely save money with high-efficiency models, but if you live in a hotter area, you probably don’t need to crank the thermostat as often.

Size

As you’re furnace shopping, you’ll see most furnaces scale from 40,000 to 120,000 British thermal units (Btu). The size of a furnace indicates how much space it’s able to heat, so you’ll need to figure out how big your house is. Multiply your total square footage by 40 to determine what a new furnace should be able to produce in Btu.

While a 40,000 Btu furnace may cost between $2,000 and $4,500, you can expect to pay $4,000 to $8,000 for one with a higher Btu rating.

Brand

The variation in furnace pricing and reliability also depends on what HVAC brand you select. Popular brands include Lennox, Trane, Goodman and American Standard. Installation cost, the machine’s life span and any noise-reducing features all affect the price you pay. Some brands also offer generous warranties.

“Brand makes a huge difference. I see Trane outlasting most of the other brands out there,” Jamasb said. “Trane heat-exchanging parts are thicker than other brands, and they use only aluminum. That’s a huge help — plus they’re engineered with a precise welding process.”

Furnace technicians in your area should be familiar with what customers near you have purchased and should be able to provide recommendations. It’s always a good idea to ask your technician why they recommend a specific brand over another.

» PROTECT YOUR INVESTMENT: Best home warranties for HVAC

Installation

Not only does your spot on the map affect the price of your heat over time, but it also affects your one-time installation cost. Labor fees vary from area to area, so check out quotes with local HVAC companies to get the most accurate estimates. Teaming up with professionals near you can also help you better assess what type and size of furnace will fit your home.

For example, a furnace for a Chicago homeowner might start at $2,400, while someone in New York City might spend at least $3,500 on an installation. These figures may go up if you need an old furnace removed or require new gas lines and ductwork in addition to the furnace. Your local ordinances may also require that you pay for a permit when installing a new furnace.

Tax credits

Owners of natural gas and oil furnaces purchased and installed since Jan. 1, 2023, can claim a federal tax credit when they purchase high-efficiency models. You can get a credit of up to 30% of your project’s total cost, with a $600 maximum credit. In order to receive this tax credit, choose an ENERGY STAR-certified furnace.

When to buy a new furnace

Though a new furnace can make a dent in your bank account, the good news is that many newer models last up to 15 years. Neglecting maintenance and poor installation can shorten this prediction. You’ll know when it’s time to look for a new furnace if it’s making strange noises, collecting debris, undergoing temperature fluctuations or increasing your energy bills.

“You should have your furnace checked every season — about every six months,” Jamasb said. “With good maintenance, people can generally expect about 13 to 15 years of life from a furnace.”

Once your furnace becomes inefficient due to a restriction of airflow, it will work harder to get the job done and create a spike in monthly utilities. At that point, it’s usually worth buying a new furnace to avoid higher bills or frequent repairs.

Other extreme circumstances, like carbon monoxide leaks, call for immediate replacement. Signs of carbon monoxide include a yellow flame rather than a blue one, excess moisture on windows and walls, soot surrounding the furnace and homeowners experiencing nausea, lightheadedness or other symptoms of hypoxia.

When to repair your furnace

If your furnace is on the fritz but still fairly young, you might consider repair rather than replacement. A machine under 15 years old that requires a repair probably doesn’t need to be tossed out, especially if the repairs are 50% less expensive than a replacement. Low airflow, water leaks and thermostat updates are common repairs that aren’t considered severe, while a bad heat exchanger will likely need to be replaced entirely.