How Much Does It Cost to Replace a Furnace?

Still deciding whether you need a new furnace? Start with repair or replace a furnace — this page assumes replacement is already the likely path.

Gas or electric: what changes?

Electric is cheaper to install — no gas line, no flue, no combustion safety work. Gas is usually cheaper to run, because it delivers 80–98 cents of heat per fuel dollar burned, where electric resistance heat converts one-for-one at a much higher cost per unit of heat in most of the country. Electric makes the most sense where winters are mild, gas isn't available, or the home has solar; in many colder climates, gas costs more to install but less to live with.

One option not in the cards above: oil, at $6,750 to $10,000 installed (NerdWallet) — fewer installers work on it and the units cost more, so it's rarely the cheaper choice even where it's already the existing fuel.

What does the furnace itself cost?

$700 to $6,200 for the unit alone, before installation, depending on fuel and efficiency. By home size, NerdWallet puts the unit at:

1,000 sq ft

$1,200–$2,000

2,000 sq ft

$2,400–$4,000

3,000 sq ft

$3,600–$6,000

An 80% AFUE unit is roughly $700 to $1,800; a 96%+ condensing unit is $2,800 to $6,200. The rest of the installed price is labor plus a permit and, on a fuel change, new venting.

Square footage is a planning shortcut, not a sizing method. An installer sizes your furnace with a heat-loss (Manual J) calculation that accounts for insulation, windows, ceiling height, and climate — not square feet alone. Two 2,000 sq ft homes in different climates, or with different insulation, can need meaningfully different furnace output. Use the table above to plan a budget, not to pick a model.

What does installation cost?

Labor runs $75 to $100 an hour and a furnace install takes 4 to 8 hours (Bob Vila) — so figure $1,500 to $3,000 in labor and materials beyond the unit for a straightforward swap. What pushes it higher:

Add it up and a "$4,000 furnace" can land near $7,000 once a permit, some duct repair, and condensing venting are in.

Is a high-efficiency furnace worth paying more for?

It becomes more attractive in colder climates, where the furnace runs enough hours each year for fuel savings to matter. A condensing (96%+ AFUE) furnace pulls a second round of heat out of the exhaust, so roughly 96 cents of every fuel dollar reaches the house instead of about 80 for an older standard-efficiency unit (U.S. Department of Energy), and it typically costs more upfront than a standard-efficiency model — the exact premium varies enough by brand and region that we won't quote a single payback period here. In a long, cold heating season the fuel savings compound meaningfully over the furnace's life; in a mild climate, the furnace often wears out before the difference is made back. One thing forcing the decision either way: the DOE minimum AFUE for new gas furnaces rises to 95% for models built from late 2028, so 80% units are on the way out regardless.

Should you replace the AC at the same time?

If the AC is also approaching the end of its expected life, it's worth pricing both jobs together — the furnace blower and the AC's indoor coil share one cabinet, and a modern variable-speed blower is designed to pair with a modern coil rather than an older one. Adding the AC is $4,000 to $8,000 on top of the furnace (Bob Vila).

Before you get quotes

• Plan before it dies. A furnace that fails in a January cold snap is an emergency call at a premium, with no time to compare quotes — the shoulder season gives you room to shop.
• Get three quotes. Quotes on the same scope can vary significantly between contractors.
• Match the efficiency to the climate, not the sales pitch. A 96% furnace in a mild climate is money you will not get back.
• Ask what the quote includes — permit, old-unit haul-away, a new thermostat, and a duct inspection are line items some installers leave out to look cheaper.
• Check for rebates. Gas utilities and some states still offer $200 to $1,000 toward a high-efficiency furnace even though the federal 25C tax credit ended for 2026 installs.
• Budget for it before it fails. A furnace is a when-not-if expense — the maintenance budget calculator folds a replacement like this into a yearly figure.