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last_updated_date Last updated: June 30th, 2023

Guide to Furnace Replacement Costs: Factors, Estimates, and Considerations


Furnaces are vital in providing a comfortable temperature and improving air quality. This home equipment enhances overall well-being and livability.

Recognizing when a furnace needs replacement ensures its continued functionality and efficiency. Several signs may indicate the need for a replacement. These include frequent breakdowns or repairs, age (typically around 15-20 years), an increase in energy consumption, uneven heating, strange noises or odors, and poor indoor air quality.

Guide To Furnace Replacement Costs: Factors, Estimates, And Considerations

With the cost of living constantly increasing, many homeowners wonder how much a furnace replacement may cost. So let us explore the factors influencing furnace replacement costs and estimate what you can expect to pay in the year.

Furnace Replacement Cost

When it comes to repair, replacement, or installation costs for furnaces, they can vary depending on factors such as the type of furnace, its size, and the region you live in. These costs may fluctuate based on additional factors such as the complexity of the installation, the need for ductwork modifications, and the energy efficiency rating of the new furnace.

However, the following table gives us an idea of the national average.

Service Type National Average Cost
Repair $300-$1200
Installation $4,820 – $9,350
Replacement $2,800 and $6,800

Types Of Furnace And Cost To Replace Them

When it comes to the cost of furnace replacement, understanding the different types of furnaces and their associated expenses is crucial. Here, we’ll look closely at some common furnaces and provide an overview of the expected replacement costs.

Electric Furnace Replacement Cost

Electric furnaces are heating systems that use electricity, instead of burning fuel, to generate heat. They are popular in areas where electricity is affordable. The electric furnace replacement cost typically depends on factors like brand model, labor costs, and unit efficiency.

On average, you can expect to pay between $1,500 to $5,000 for a basic electric furnace replacement. However, more advanced models with higher efficiency ratings may cost between $5,000 to $10,000 or more.

Natural Gas Furnace Replacement Cost

Natural gas furnaces are widely used in many parts of the States due to the availability and affordability of natural gas as a fuel source. The cost of replacing a natural gas furnace can vary depending on factors such as the furnace’s size and installation requirements.

On average, you can expect to pay between $7,500 to $15,000 or more for a new high-efficiency gas furnace replacement. However, basic models with common features may cost between $2,500 to $7,500.

Oil Furnace Replacement Cost

Oil furnaces are less common but are still used in some regions where natural gas is not readily available like the Pacific Northwest, including parts of Oregon and Washington. The oil furnace replacement cost can be higher compared to electric or natural gas furnaces due to factors such as oil tank installation and fuel delivery.

On average, you can expect to pay between $3,000 to $8,000 for a basic oil furnace replacement. However, prices may vary depending on the specific requirements of your installation, and high-efficiency oil furnace replacement costs can stay between $8,000 to $15,000 or more.

Propane Furnace Replacement Cost

Propane furnaces are commonly used in areas where natural gas is unavailable, and propane is used as a primary fuel source. The cost of replacing a propane furnace can vary depending on factors such as the brand, model, size, and labor costs in your area.

On average, you can expect to pay between $3,000 to $8,000 for a primary propane furnace replacement. However, high energy efficiency propane furnaces with additional features may cost between $8,000 to $15,000 or more.

Green Furnace Replacement Cost

Green furnaces, such as geothermal or solar-powered ones, are gaining popularity with an increasing focus on energy efficiency and environmental sustainability. These furnaces utilize renewable energy sources and can be more expensive upfront but may save money through reduced energy consumption.

The average cost of green furnace replacement can vary significantly depending on the type, brand, and installation requirements.

On average, you can expect to pay between $10,000 to $25,000 or more for a green furnace replacement, depending on the technology and system size.

Tip – It’s important to note that these are the estimates of furnace replacement and can vary based on various factors, such as your location, the complexity of the installation, and the specific features or upgrades you choose. It’s always best to obtain quotes from multiple reputable HVAC contractors in your area to get an accurate estimate for your specific furnace replacement project.

Factors Affecting Furnace Replacement Costs

Several key factors can influence the overall expense concerning average furnace replacement costs. Understanding these factors can help you make informed decisions and appropriately budget your furnace replacement project. Let’s take a closer look at some of the main factors


The size of the furnace is an important factor that can impact the replacement cost. Furnaces are typically sized based on the heating capacity they can deliver, measured in British Thermal Units (BTUs).

A furnace that’s too small for your space may struggle to heat your home or place of business adequately, or the big ones may be a bit too much. Installing the right-sized furnace is crucial for optimal performance and energy efficiency. A furnace replacement cost can vary depending on the size, with larger furnaces generally more expensive.


The efficiency rating of a furnace, also known as Annual Fuel Utilization Efficiency (AFUE), is another significant factor that can impact replacement costs. Furnaces with higher efficiency ratings typically cost more upfront, but they can offer long-term savings on energy bills by consuming less fuel.

High-efficiency furnaces can have AFUE ratings of 90% or higher, while standard furnaces typically have AFUE ratings between 80% and 90%. The higher the AFUE rating, the more efficient the furnace and the higher the cost.


The type of furnace you choose for replacement can also affect the overall cost. As discussed earlier, electric, natural gas, oil, propane, and green furnaces have different costs. Electric furnaces may have lower upfront costs but higher operating costs than natural gas, oil, or propane furnaces.

Green furnaces, such as geothermal or solar-powered furnaces, can have higher upfront costs due to the installation of renewable energy systems. Considering the type of furnace that best meets your needs and budget is crucial when estimating furnace replacement costs.


The brand of furnace you choose can also impact the cost of replacement. Established and reputable furnace brands may have a higher price tag due to their reputation for quality, reliability, and performance. However, they may also offer more extended warranties, better customer support, and higher efficiency ratings, which can be worth the investment.

Labor Costs

Labor costs associated with furnace replacement can vary depending on your location, local labor rates, and the complexity of the installation. Factors such as removing the old furnace, installing the new furnace, modifying ductwork or venting, and obtaining necessary permits can all impact labor costs.

Signs Your Furnace Needs Replacement

Regular upkeep and repairs will help your furnace last longer, but some signs might mean it’s time for a replacement. Ignoring these warning signs may decrease efficiency, and increase energy costs and safety risks. The following are some significant signs that your furnace may require replacement:


Depending on the model and the maintenance level, a furnace typically lasts 15 to 20 years. Older furnaces are less reliable and more prone to problems, so if yours is approaching or has reached this age range, it might be time to consider replacing it.

Frequent and Expensive Repairs

If your furnace needs frequent and expensive repairs, and the prices are rising, replacing the furnace may be more cost-effective in the long run. Frequent breakdowns and repair costs may indicate that your furnace needs to be replaced because it is no longer dependable and could be causing problems.

Reduced Efficiency

If your energy bills noticeably increase despite your furnace’s usual usage patterns, it may be a sign that it is losing efficiency. Older furnaces or ones with poor AFUE ratings could have trouble heating your home effectively, leading to more energy intake. A more energy-efficient furnace upgrade can lower energy costs and result in long-term financial savings.

Uneven Heating or Convenience Problems

If your home’s heat is uneven or you’re uncomfortable despite setting the thermostat, it may be a sign that your furnace needs repair. To restore comfort and performance, a failing furnace that cannot distribute the heat properly may cause uneven heating.

Loud Noises or Weird Smells

Loud noises from your furnace, such as banging, clanging, or rattling, may indicate underlying problems that may call for a replacement. Unusual odors, like burning or gas leaks, also signify that your equipment requires a replacement. These may be signs of issues with the furnace’s internal components, and they must be fixed immediately to prevent potential safety risks.

Does A Home Warranty Cover Furnace?

Protecting your valuable investments, including your furnace, is essential as a homeowner. One option to consider is a home warranty, a service contract that covers the repair or replacement of major home systems and appliances, including furnaces. However, it’s essential to understand what a home warranty typically covers regarding furnaces.

A home warranty usually covers a furnace’s mechanical components, such as a furnace blower motor, heat exchanger, igniter, and thermostat. It may also cover electrical components, such as the circuit board and wiring. However, reviewing your home warranty’s specific terms and conditions is essential, as coverage varies among providers.


In conclusion, the cost of a furnace replacement in 2023 can vary greatly depending on factors such as the type of furnace, size, efficiency rating, and installation requirements. Electric furnaces are more affordable, while natural gas, oil, propane, and green furnaces may come with higher price tags.

It’s important to consider all these factors and obtain quotes from reputable HVAC contractors to estimate your specific furnace replacement project accurately. Proper budgeting for furnace replacement can help homeowners make informed decisions and ensure a warm and efficient heating system in their homes.

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