Furnace Replacement Cost: What to Expect in 2026
A furnace is one of those systems most homeowners never think about until it stops working. When it does, prices vary widely enough that it pays to understand what you are buying before a contractor hands you a quote.
TheRemodelers works with licensed HVAC contractors to help homeowners understand what a new furnace costs, what drives that price up or down, and what to expect on installation day. If you are still comparing furnaces with other ways to heat a home, our complete guide to home HVAC systems puts them side by side.
Not sure the furnace is ready for replacement? The guide to furnace repair cost covers the fix-or-replace decision. This guide is for homeowners who have decided on a new furnace, or want to know the price before they decide. If you are weighing a furnace against hot-water heat, the guide to boiler replacement cost covers that alternative.
What a New Furnace Costs
A new furnace typically costs $2,000 to $10,000 or more installed. Most homeowners pay $4,000 to $6,500 for a mid-tier gas furnace in an average-sized home. The range is wide because efficiency tier, fuel type, and the condition of your ductwork all move the number. If your air conditioner needs replacing too, our guide to HVAC replacement cost shows whole-system prices.
Furnace Type | Typical Installed Cost |
|---|
Single-stage gas furnace (80% AFUE) | $2,500 – $4,500 |
Two-stage gas furnace (90–96% AFUE) | $4,000 – $7,000 |
Variable-speed / modulating gas furnace (96–98% AFUE) | $6,500 – $10,000+ |
Electric furnace | $2,000 – $5,500 |
Oil furnace | $4,000 – $9,000 |
These figures include the unit, standard installation labor, and typical permit costs. They assume the existing ductwork, gas line, and electrical service can already handle the new unit. Work in any of those areas adds to the total.
What Drives Furnace Cost Up or Down
Efficiency Tier
Efficiency tier is the biggest cost factor. A single-stage furnace runs at full output whenever it is on. A two-stage furnace runs at a lower output most of the time and ramps to full power only on the coldest days, which improves comfort and efficiency. A variable-speed or modulating furnace adjusts output continuously, giving the most even temperatures and the highest efficiency at the highest price.
Fuel Type
Fuel type affects both the equipment price and what you pay to run it. Gas furnaces are the usual choice where natural gas service is available. Electric furnaces cost less upfront but more to run in most climates. Oil furnaces are found mainly where there is no gas service, and they typically cost more to install and to operate.
Furnace Size
Furnace size, measured in BTUs, has to match your home’s actual heating load, not just its square footage. A qualified installer works this out with a Manual J load calculation rather than a rule of thumb. The sizing section below explains why an oversized furnace costs you in comfort and wear.
Ductwork Condition
Ductwork matters more than most homeowners expect. If the existing ducts are undersized, leaky, or poorly matched to the new furnace’s airflow, modifying them adds real cost, sometimes a meaningful share of the furnace price. A contractor who inspects the ducts before quoting, rather than after the old furnace is out, gives you a more accurate number.
Replacing the Air Conditioner at the Same Time
In a home with central air, the furnace’s blower also moves the cooled air, and the AC’s indoor coil usually sits on top of the furnace. If your air conditioner is near the end of its life too, replacing both in one visit avoids paying for the same labor twice and makes it easier to match the equipment. Our guide to central air conditioner installation cost covers the cooling side of that budget.
Regional Labor and Permit Costs
Labor rates and permit fees vary across the country. In higher cost-of-living areas, installations typically run toward the upper end of these ranges, even for identical equipment.
Furnace Efficiency Tiers Explained
AFUE (Annual Fuel Utilization Efficiency) measures how much of the fuel a furnace burns becomes heat in your home. The rest is lost through venting and combustion. An 80% AFUE furnace turns 80 cents of every fuel dollar into heat. A 96% AFUE furnace turns 96 cents into heat.
The federal minimum for most gas furnaces sold today is 80% AFUE, so an 80% furnace is still a legal choice. The Department of Energy finalized a 95% AFUE standard for gas furnaces made after December 2028, but that rule has been sent back for further court review, and its future is uncertain. Ask your contractor whether any local code in your area sets a higher bar.
High-efficiency furnaces (90% AFUE and above) cost more upfront but burn less fuel over their life. In colder climates with long heating seasons, the fuel savings can offset a meaningful share of the higher price. In milder climates, the payback stretches out, and a mid-efficiency unit is often the more practical choice. There, a heat pump paired with a furnace may also be worth pricing; see our dual fuel heat pump cost guide.
Gas vs. Electric vs. Oil Furnaces
Fuel | Installed Cost | Operating Cost | Best Fit |
|---|
Natural gas | $2,500 – $10,000+ depending on efficiency | Generally the lowest cost per unit of heat | Homes with natural gas service |
Electric | $2,000 – $5,500 | Typically higher than gas in most markets | Homes without gas service, milder climates |
Oil | $4,000 – $9,000 | Higher than gas | Areas without gas service, common in parts of the Northeast |
Gas furnaces dominate wherever natural gas service is available, with widely available service and parts. Electric furnaces cost less to buy and install, have no combustion byproducts to vent, and work anywhere with adequate electrical service. The tradeoff is higher monthly bills, because electricity usually costs more per unit of heat than gas.
Oil furnaces remain common in parts of the Northeast and other areas without widespread gas lines. They cost more to install and run than gas, but they are the practical choice where gas simply is not available.
Sizing: Why Bigger Isn’t Better
Many homeowners assume a bigger furnace heats a home better or faster. In practice, an oversized furnace short-cycles: it heats the space quickly, shuts off, and restarts soon after instead of running a longer, steadier cycle. That causes bigger temperature swings, more wear on the blower motor and ignition parts, and worse humidity control.
A correctly sized furnace is chosen with a Manual J load calculation that accounts for square footage, insulation, window count and orientation, and local climate. It runs longer, steadier cycles that are more comfortable and easier on the equipment over its lifespan.
The Installation Process: What to Expect
A straightforward furnace replacement, where the new unit fits the existing space and connections, typically takes one day. The crew will:
Remove the old furnace
Make any needed changes to the ductwork, gas or electrical connections, and venting
Set and connect the new unit
Test the system before leaving
More involved jobs can take two to three days. That includes a fuel-type change, significant ductwork changes, or new venting for a high-efficiency furnace.
Most jurisdictions require a permit for furnace replacement, and many require a follow-up inspection to confirm the work meets current code. A legitimate contractor includes the permit in the quote and schedules the inspection rather than leaving it to you or skipping it.
Warranty Considerations
Furnace warranties usually come in two parts:
Manufacturer’s parts warranty: commonly 10 years on major components, provided the unit is registered after installation
Contractor’s labor warranty: varies widely by company, so get the terms in writing before work starts
Missing the manufacturer’s registration deadline, often 60 to 90 days after installation, can cut the parts warranty to a much shorter default period. Ask directly who handles registration and by when.
What to Look for When Hiring a Furnace Installer
A Manual J load calculation. Sizing based on the old furnace or square footage alone is a shortcut, and proper sizing affects comfort, efficiency, and equipment life more than almost any other decision.
Ductwork inspection in the quote. Ask what happens if changes turn out to be needed once the old unit is out. A contractor who addresses this upfront gives you a more realistic total.
Warranty terms in writing. Get the labor warranty in writing, and ask who registers the manufacturer’s warranty and by what deadline.
Permit and inspection included. In most jurisdictions this is not optional for a furnace replacement, whatever an individual contractor says.
Final Thoughts
A new furnace is a real investment, and the efficiency tier you choose affects both the upfront price and what you will pay to run it for the next 15 to 20 years. Getting the sizing right, knowing what ductwork might add, and confirming warranty terms in writing are what separate a smooth installation from years of problems.
Once the new furnace is in, our guide to furnace maintenance explains what a yearly tune-up involves and how it protects both the warranty and the equipment.
The best way to know what your furnace will cost is to compare a few written quotes. Home Services Pros connects homeowners with licensed HVAC contractors in their area who provide free, no-obligation estimates. Call (833) 586-2038 or request your quotes online.
Frequently Asked Questions
How much does it cost to replace a furnace?
A new furnace typically costs $2,000 to $10,000 or more installed, with most homeowners paying $4,000 to $6,500 for a mid-tier gas furnace. The price depends mainly on efficiency tier, fuel type, and whether the existing ductwork needs changes.
What is a good AFUE rating for a furnace?
The federal minimum for most gas furnaces is 80% AFUE. High-efficiency furnaces run 90% to 98% AFUE and cost more upfront but burn less fuel, which matters most in colder climates with long heating seasons. A 95% minimum for furnaces made after 2028 is under court review, so its future is uncertain.
Is a bigger furnace always better?
No. An oversized furnace short-cycles, heating quickly and shutting off repeatedly instead of running longer, steadier cycles. That causes bigger temperature swings, more wear, and worse humidity control than a correctly sized furnace chosen with a load calculation.
How long does furnace installation take?
A standard replacement typically takes one day when the new furnace fits the existing space and connections. Jobs that need ductwork changes, a fuel-type change, or new venting for a high-efficiency unit can take two to three days.
Is gas or electric better for a furnace?
Gas furnaces generally cost less to run where natural gas service is available. Electric furnaces cost less to buy and install, $2,000 to $5,500, but typically cost more to run per unit of heat, which means higher monthly bills over the furnace’s life.
Do I need a permit to replace a furnace?
Yes, in most jurisdictions. A permit and follow-up inspection confirm the installation meets current code. A legitimate contractor includes the permit in the quote and schedules the inspection.
What warranty should come with a new furnace?
Expect a manufacturer’s parts warranty, commonly about 10 years on major components when the unit is registered, plus a separate labor warranty from the installer that varies by company. Confirm the registration deadline and the labor terms in writing before installation begins.
