How Much Does a New Furnace Cost in Indianapolis? [2025 Data]

A new furnace costs around $4,626 in Indianapolis, but the project may come in anywhere between $2,818 and $6,462. The cost all depends on what type of furnace you choose, the capacity you need, and the efficiency rating, while extras like new ducts or a smart thermostat can also increase the total. Indianapolis is known for frigid winters, where temperatures regularly dip below freezing. Homeowners here require dependable heating, so if your furnace is on the fritz, it’s time for an upgrade.

Furnace Cost Factors

So, you’re ready to install a new furnace in your home. But how much will this project cost? The total depends on the following factors.

Size

The size or capacity of a furnace is measured in British thermal units, or BTUs, which is how much energy it takes to increase the temperature of 1 pound of water by 1 degree Fahrenheit.

Simply put, the more square footage you need to heat, the more BTUs you’ll need. For the average space in Indianapolis, where the median home size is 1,900 square feet, you’d need around 57,000 to 114,000 BTUs. Check with an HVAC pro in Indianapolis, Indiana, to find the best furnace size for your household.

Type of Furnace

One of the biggest cost influences is the type of furnace you choose. Natural gas is the most common for Indianapolis homes, as this heat source is reliable, effective, and affordable. However, many homes also use electric furnaces for heating. Oil is less common since natural gas offers lower fuel costs, but homes outside the city may use propane- or wood-fueled heating.

No matter what type you choose, here’s what you can expect to spend for a new furnace.

Efficiency

The higher the fuel utilization efficiency (AFUE) rating on your furnace, the more efficiently the system will convert fuel to heat. That translates to bigger cost savings on your energy bills, so investing more upfront in a higher-efficiency system will save you money over time.

Ductwork

If you’re installing a new furnace or replacing an old one, also contact an HVAC pro to check your ducts. You may need to seal leaks or replace old ductwork altogether, so factor the cost to replace ducts in your budget. In Indianapolis, replacing them costs around $220 to $1,180.

Smart Thermostat

If you want to maximize your long-term cost savings on your new furnace, consider adding a smart thermostat. This device can help set temperatures for optimal energy savings.

Installing a smart thermostat costs around $130 to $500 and will save you up to 12% on heating costs.

Furnace Pro Costs

Installing a new furnace is a complex job, so it’s important to budget about $1,500 for the cost of labor. A local furnace pro can install a furnace in as little as four hours while ensuring the project is safe, efficient, and up to code.

Your HVAC contractor will also handle the permitting process. In Indianapolis, HVAC work requires a heating system permit from the Department of Business and Neighborhood Services, which costs about $150 for homes under 2,500 square feet, plus $23 for each additional 1,000 square feet. If you’re installing a combined heating and cooling system, the cost is around $190 for 2,500 square feet, plus $23 for each additional 1,000 square feet.

Does a New Furnace Increase Home Value?

In a place with winters as cold as the ones in Indianapolis, a new furnace offers a boost of up to 10% on your home’s value. You’ll get the most value out of a high-efficiency furnace. But even if you’re not planning on selling your home anytime soon, a reliable furnace will be priceless when you’re warm and cozy all winter long.

How Angi Gets Its Cost Data

Home is the most important place on earth, which is why Angi has helped more than 150 million homeowners transform their houses into homes they adore. To help homeowners with their next project, Angi provides readers with the most accurate cost data and upholds strict editorial standards. We survey real Angi customers about their project costs to develop the pricing data you see, so you can make the best decisions for you and your home. We pair this data with research from reputable sources, including the U.S. Bureau of Labor Statistics, academic journals, market studies, and interviews with industry experts—all to ensure our prices reflect real-world projects. 

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