How Much Does a New Furnace Cost?

Candace Nelson
Written by Candace Nelson
Updated January 7, 2022
woman, man, and child in cozy blankets huddled next to furnace in low light and smiling
Photo: BraunS/E+/Getty Images

Installing or replacing a furnace costs $5,500 on average, with a typical range between $2,600 and $6,400

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You probably haven’t had to install a new furnace recently, because they last 20 years on average. So if you haven’t gone furnace shopping in a while, they might look a little different than your current unit. 

Furnaces have become much more efficient. Older models were commonly 80% efficient or less, which means 20% of their heat was lost to waste. Newer models are 90% or better; you can even get 95% efficient models. The most efficient models cost more upfront, but they’ll save you money on energy bills every month with an efficient model. And don’t forget to check for tax credits!

How Much Does It Cost to Have a New Furnace Installed?

The average cost of a furnace unit alone is $2,300 to $7,200, plus $150 to $500 per hour for installation. A local furnace installation company can assess your home and recommend the most efficient system for its size, configuration, and location. 

A furnace's heat output is measured by British Thermal Unit (BTU), which is the amount of energy needed to heat one pound of water by one degree Fahrenheit. As a general rule, you’ll need 30 to 50 BTUs per square foot.  An 80,000 BTU furnace will keep a 1,600- to 2,000-square-foot home warm and cozy.

How Much Does It Cost to Install a Furnace Near You?

One of the biggest factors in furnace selection is where you live. Here’s what you can expect to pay in 10 cities:

  • Baltimore: $3,200–$7,000

  • Salt Lake City: $3,000–$7,000

  • Seattle: $2,500–$6,000

  • Detroit: $3,000–$6,000

  • New York City: $3,500–$7,500

  • Los Angeles: $3,000–$7,000

  • Minneapolis: $3,200–$6,500

  • Nashville, TN: $2,500–$5,500

  • Houston: $2,500–$7,000

  • Chicago: $2,400–$5,500

How Many BTUs Can I Get on My Budget?

The size of your home factors into the size (and type!) of furnace you need. Expect to pay more for the unit if you live in a larger home.

Here is a breakdown of the typical furnace cost by BTU rating:

  • 40,000–60,000 BTU: $2,000–$4,500

  • 75,000–100,000 BTU: $2,500–$5,900

  • 120,000–140,000 BTU: $4,000–$8,000

How Much Does It Cost to Install a Furnace Yourself?

Installing a furnace is not a job to handle on your own. A furnace installed incorrectly could be a health and safety hazard. The furnace must be properly connected to vents and gas lines to prevent the spread of carbon monoxide, a deadly gas, around your house. Save yourself the headache and hire a pro to do the job right.

“Whenever there are fossil fuels used in any appliance, such as a furnace, fireplace, clothes dryer or cooktop, we install carbon monoxide detectors,” says Bob Tschudi, general contractor in Raleigh, NC. “This is required in most states and municipalities and is a good safety measure, as even the most expensive appliances break down eventually.”

Furnace Installation Cost Breakdown

The price of your new furnace installation varies based on the type you choose and what furnace you had before. Switching from an oil to a gas furnace, for example, will require new gas lines, while a geothermal system might require new ducts. 

Here’s what you can expect to pay:

  • New furnace: $2,300–$7,200

  • Installation labor: $150–$500 per hour

  • Old furnace removal: $60–$500 

  • New gas lines: $250–$800

  • New ductwork: $3,000–$5,000

  • Permit and inspection: $400–$1,500

How Much Does It Cost to Install a Furnace by Type?

The climate of where you live has a massive impact on what type of furnace you should have in your home. A Northern Minnesota lake house is going to need a more powerful furnace than a Creole-style charmer in New Orleans. 

The price to install a new furnace depends on the type you choose and the size of your house. Here is the typical price range by type:

  • Gas: $3,800–$10,000

  • Electric: $2,000–$7,000

  • Oil: $6,750–$10,000

  • Mini-Split: $2,000–$15,000

  • Geothermal: $4,000–$17,000

Gas Furnace

Gas furnaces are the most popular, particularly in cold Northern regions. Standard gas furnace prices average $3,800 to $10,000 to install, and you should expect to pay 50 to 100% more for high-efficiency models. A gas furnace is more expensive than others to install, but the cost of natural gas is less expensive than other energy sources.

Pros of Gas Heat:

  • More efficient than electric

  • Natural gas is inexpensive

  • Heats quickly

Cons of Gas Heat:

  • High environmental impact

  • Requires duct work

Electric Furnace

Electric furnaces are most common in Southern states where winters are mild. They’re extremely high-efficiency, but cost more to run because they use a lot of electricity when it gets cold. Electric furnace installation costs about $2,000.

Pros of Electrical Heat:

  • Efficient

  • Low maintenance

  • Low installation cost

Cons of Electric Heat:

  • High monthly cost

  • Heats slowly

Oil Furnace

Oil furnaces were once popular in the Northeast, but have fallen out of favor. Oil furnace installation costs between $6,750 to $10,000 on average for a 1,600- to 2,000-square-foot home.

Pros of Oil Heat:

  • Lower environmental impact than natural gas

  • Oil can be bought and stored

Cons of Oil Heat:

  • High fuel cost

  • Releases carbon monoxide 

  • Requires oil storage on site

Hot water heater , gas furnace and air conditioning unit in plain, bare basement
Photo: Comstock/Stockbyte/Getty Images

Mini-Split Furnace

A ductless mini-split furnace (also called ductless HVAC system) can be installed anywhere. The unit is mounted to the wall, then connected to an outdoor unit with a compressor and fan. A ductless system is efficient because much of a home’s energy is lost in the ducts with more traditional furnaces.

A mini-split furnace also allows you to control the temperature room by room, so you don’t waste energy heating unused rooms. It can also be a quick solution to bring heat or cooling to an addition, such as a converted attic or that basement bedroom that never gets warm.

Pros of Mini-Split Furnaces:

  • Very efficient

  • Require only a small hole drilled into the wall

  • Allows you to control temperature in each room

Cons of Mini-Split Furnaces:

  • Generally not powerful enough for cold climates

  • Expensive to install

  • Requires monthly maintenance

  • Wall-mounted units aren’t the most attractive

Geothermal Heat

With an average installation cost of $10,300, geothermal heat has the highest up-front cost—but it also comes with lower monthly bills and a tax credit could help offset the installation cost. 

A geothermal heat pump takes advantage of the consistent temperature just below the ground. It pulls cold air from the house in the winter, runs it through underground pipes, and flows it back into the house. In the summer, warm air is pulled out, cooled underground, and returned to the house. 

Pros of Geothermal Heat:

  • Low monthly cost

  • Environmentally friendly

  • Extremely efficient

Cons of Geothermal Heat:

  • High installation cost

  • Expensive to repair

What Factors Influence the Cost to Install a New Furnace?

In addition to the unit and labor costs, you might need to install gas lines or new ductwork.

Cost to Install Gas Lines

If you’re installing a different kind of furnace than you previously had in your home, you might need to factor in additional expenses. For example, if you’re moving to a gas furnace, you’ll need gas lines installed. This could cost $250 to $800.

Cost to Install Ductwork

At a minimum, the new unit needs to properly fit to your ductwork and vents. If you choose a new type of furnace, you might need to install new ductwork, which costs an average of $3,000 to $5,000.

FAQs

How can I save money on heating costs?

Warmed or cooled air can escape your home through drafty windows and doors. If you notice any gaps, be sure to caulk and seal them. 

You can also hire a local pro for an energy audit to get a list of energy-saving recommendations. 

Finally, check your insulation. It can settle in over time and become less effective. The Environmental Protection Agency estimates that you can save an average of 15% on heating and cooling costs (or 11% of total energy costs) by sealing leaks and making sure attics, crawl spaces, and basements have a nice layer of insulation.

How do I maintain a furnace?

Don’t skip the most basic maintenance: changing the filter. Filters 1 to 3 inches thick need to be replaced at least every three months. Filters 5 to 6 inches thick could go a year before getting changed. The filters catch dust and allergens, so it’s worth keeping them clean.

It’s a good idea to have a professional service your furnace every year before winter. They’ll inspect, clean, and repair as necessary. This could give you peace of mind that you won’t be calling furnace pros for help during a cold snap in the middle of February.

When should I consider replacing a furnace?

If your furnace is over 18 years old and having problems, it might be more economical to replace than repair. Remember: new models are much more efficient than older ones, so you stand to save on monthly energy costs.

What other projects should I do at the same time?

When investing in a new furnace, it’s smart to do a home energy audit. That will give you a list of any projects that would help with efficiency, such as sealing or replacing windows and insulating the attic.

What’s the difference between a boiler, furnace, and heat pump?

A furnace is a big unit, usually located in the basement or in its own utility closet, where gas, heating oil, or electricity heats the air. The warmed air is then pushed back out through ducts and vents. 

A boiler uses electricity, heating oil, or gas to heat water that is pushed into the room through a radiator. This is one of the oldest and most effective ways to heat a house, but radiators can also be unsightly and leave hot and cold spots in the room.

Heat pumps use a refrigerant to move heat from outside into the house and return it to the room through ducts and vents.

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