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How Much Does a New Furnace Replacement Cost?

Average cost range:

$2,500 - $8,596

The average cost for furnace replacement or installation ranges from $2,500 to $7,150 which would include the cost of furnace system, materials, and labor and installation costs. Other cost factors include type of furnace, size of the unit needed, home’s square footage, energy efficiency levels.

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Furnace Replacement Costs

Furnace replacement costs for your home will depend on the type of resource your furnace uses. A natural gas furnace costs on average $2,200 to $7,150 to replace. An electric furnace prices out to be more affordable and ranges between $1,000 to $5,500 to install. If you live in an area where resources are not available such as gas or electricity, you can install an oil burning furnace with a reserve tank for around $6,200.

Furnace Repair Costs

When deciding between repairing or replacing your home furnace you will want to base it off of the age of your furnace. It would not make sense to spend $1,800 dollars for furnace repair on an 18-year-old system that might cost $3,000 to fully replace. If your furnace has used up 3/4 of its life expectancy, do not spend more than 1/3 of the cost of a replacement furnace on repair costs for an old unit.

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Furnace Costs by Type

There are three types of furnaces you may have installed or replaced in your home.  Homeowners can install new gas furnaces, electric furnaces, or an oil burning furnace. A natural gas furnace is the most common furnace type installed in homes. However, there are other options depending on your needs and some homeowners may choose to install an energy efficient electric furnace or an oil burning furnace depending on available fuel type resources. Here is the average cost for each furnace type below:

Gas Furnace Prices by Brand

There are plenty of top gas furnace brands to choose from. Here is a list of the most common brands and the price of a new  furnace as well as installation costs:

What Factors Affect the Cost of a New Furnace

Furnace installation is pretty simple to break down. You will pay for the replacement furnace unit, service charge for local labor rates, and the disposal of old unit, equipment, and any local permits required. When you are installing a new home furnace the cost of a new home heating unit will breakdown in below components:

  • Your furnace unit will make up about 60% of your  total cost estimate
  • The local labor costs will usually be around 25% of total costs to install
  • The additional costs such as old furnace removal, extra equipment, and local permits needed make up around 15% of your installation costs

How Long Does a Furnace Usually Last? 

On average a forced air natural gas furnace last between 15 to 30 years with yearly maintenance. You can determine the age of your home’s furnace by locating the metal identification plate on the inside of the chamber door, and jotting down both the model and serial number. You can then give the furnace manufacturer a call and they can help you determine the manufactured date and the average prices of an identical replacement furnace.

Energy Efficient Furnaces

One final consideration regarding furnace repair or replacement is heating efficiency. The Annual Fuel Utilization Efficiency (AFUE) number is the percentage of fuel your system converts to heat versus being lost through its exhaust or other deficiencies. Older systems, those approaching 20 or more years are probably running at around 70 percent efficiency. According to Energy Star, installing new and more efficient heating and air conditioning equipment can cut your energy costs by about $200 dollars a year for the average home. Savings that can help pay for a new system.

Common Furnace Repair Problems

As with most machinery, furnace unit parts break or malfunction. Furnace repairs are required to be done by a trained HVAC contractor to bring the system back to working order. Your home’s furnace needs to be at maximum efficiency before the winter season arrives especially for homeowners living in regions where the temperature can drop below freezing. Here is a roundup of common furnace repair problems that may need to be fixed by a local heating professional or could be taken of on your own if minor:

  • Failure to change or clean filters. A clogged filter forces your system to work harder to circulate the heated air. The extra strain can fry fan motors and their limit switches, inviting costly repairs.
  • An overall lack of furnace maintenance. Failure to maintain your heating system with periodic maintenance and adjustments can lead to major equipment failures and expensive repairs.
  • A faulty or malfunctioning pilot light in your home furnace system may prevent your system from igniting at start up.
  • A faulty thermostat can wreak havoc on your system by inducing cycling, which is when your system turns on and off intermittently and ends up causing your furnace to need repairs.
  • A faulty fan limit switch may cause the blower to run continuously, shortening its expected life span and/or frying the motor.
  • A tripped circuit breaker or blown fuse supplying your furnace’s heating unit may be a sign of a more serious problem. Something within the system could be producing a larger load than the breaker can handle.
  • If the pilot light will not stay lit, it could be as simple as a draft in the room. Verify all windows and doors are closed and eliminate any drafts by caulking, installing weather stripping or replacing thresholds. This problem could also indicate a more serious problem with a dirty or faulty thermocouple.

If you suspect a problem with your furnace, do not hesitate to call in the professionals. Delaying the call could be dangerous for you or lead to more costly furnace repairs down the road.

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Local Furnace Installers

Due to their ever-advancing technologies; it is easy to get lost in translation when receiving estimates from heating and air conditioning contractors. Asking HVAC contractors the right questions is key to purchasing the correct furnace for your home and a quality installation.

  • Ask for several bids from local contractors. Never go with the lowest bid, as you are likely to get inferior service and equipment.
  • Ask the contractors what their equipment markup is. A cheaper labor price might include hidden markups in the equipment.
  • Ask your contractor to install a new thermostat. Newer technologies require newer devices to run them.
  • Ask for a detailed estimate or proposal that outlines the entire scope of the job including equipment manufacturers with model numbers and scheduled completion dates.
  • Ask the contractor to go over your estimate including mathematical calculations used to size the furnace. Verify that their calculations are correct to avoid buying an undersized or oversized furnace.
  • Ask for name brand equipment. Cheap knockoffs might fail and leave you out in the cold.

A lot goes into replacing a furnace such as selecting the right equipment and choosing the right contractor for the job. Being thorough and doing your homework will increase the chances of a smooth installation or repair. Use this step by step HVAC contractor checklist during your HVAC installation process to make sure things go as smoothly as possible

How to Prepare for a Furnace Installation

Installing a new furnace is a major undertaking. Furnace installations can take anywhere from a few hours to a couple of days depending on the scope of the project. Most homeowners only face this project a few times in their lifetimes. Preparing your home before the technicians arrive is a crucial part of the project that your installers will appreciate.

  • Remove any clutter around or near the furnace areas. A clean area maintains a safer and more efficient work area.
  • Remove valuable and irreplaceable objects from the work area. Although most technicians take extreme care not to cause damage, accidents happen.
  • A new furnace usually includes a new thermostat. Have some touch up paint on hand to cover any imprint leftover from the old equipment.
  • Treat others as you would want to be treated. Happy technicians usually perform better on the job. They will go the extra mile for you if you are courteous, provide them with restroom facilities and offer them a cold drink or two.