How much does a new furnace cost?
A furnace is one of the most important investments a homeowner can make. Whether you’re replacing an old, inefficient model or installing a brand-new system in a home under construction, the price tag can vary widely depending on several factors.
So, how much does a new furnace cost in 2025? On average, homeowners can expect to spend between $3,500 and $9,500, depending on the type, size, efficiency rating, brand, and installation complexity.
But the upfront cost of a new furnace doesn’t tell the whole story; long-term savings from energy efficiency, warranties, and maintenance plans can make a significant difference in the total value of your purchase. How Much Does a New Furnace Cost? This detailed guide breaks down everything you need to know, including equipment costs, labor charges, hidden fees, and strategies for saving money, before you invest in a new furnace.
| Category | Average Cost (USD) | Key Notes |
| Overall Furnace Cost (Installed) | $3,500 – $9,500 | Includes equipment and labor |
| Gas Furnace | $4,000 – $8,000 | Most efficient and widely used |
| Electric Furnace | $2,000 – $5,000 | Lower upfront cost, higher utility bills |
| Oil Furnace | $5,000 – $9,500 | High output, ideal for cold regions |
| Labor & Installation | $1,500 – $4,000 | Depends on system type and complexity |
| Ductwork or Permits (Extra) | $500 – $3,500 | Optional or location-based |
| Efficiency Rating (AFUE) | 80% – 98% | Higher AFUE = lower bills |
| Annual Energy Savings | $300 – $500 | From high-efficiency models |
| Lifespan | 15 – 20 years | With regular maintenance |
| Tax Credits & Rebates | Up to $600 | For Energy Star furnaces |
Understanding Furnace Costs: The Basics
The cost of a new furnace depends on several key factors, including the type of furnace (gas, electric, or oil), the brand and efficiency rating, and the size of your home.
Here’s a quick overview:
- Gas furnaces (the most popular type) usually cost $4,000–$8,000 installed.
- Electric furnaces are less expensive upfront, around $2,000–$5,000, but cost more to run.
- Oil furnaces, though powerful, are rarer today and cost about $5,000–$9,500 installed.
Efficiency is another key factor, measured by AFUE (Annual Fuel Utilization Efficiency). Higher AFUE means lower operating costs.
For example:
- A standard 80% AFUE furnace converts 80% of its fuel into heat.
- A high-efficiency 95%+ AFUE furnace may cost more initially but saves hundreds annually on energy bills.
Equipment Costs: Breaking Down the Price of the Furnace Itself
The furnace unit itself makes up the most significant portion of your total cost. Prices vary depending on brand reputation, capacity (BTUs), and technology.
| Furnace Type | Average Unit Cost (USD) | Typical AFUE Range | Notes |
| Gas Furnace | $2,000–$4,500 | 80–98% | Most common and energy-efficient for cold climates |
| Electric Furnace | $800–$2,700 | 95–100% | Lower initial cost but higher electricity bills |
| Oil Furnace | $2,500–$5,500 | 80–90% | High heating power is better for rural areas |
| Propane Furnace | $2,200–$4,800 | 80–95% | Good alternative where natural gas isn’t available |
| Dual-Fuel Hybrid Furnace | $3,500–$6,500 | 90–98% | Combines electric and gas systems for maximum efficiency |
Pro Tip: Always match the furnace capacity to your home’s square footage and insulation quality. Oversized furnaces waste energy, while undersized units overwork and fail early.
Installation and Labor Costs
Furnace installation is a complex process involving skilled labor, proper ductwork, venting, and sometimes electrical or gas line adjustments.
Labor costs typically account for 25–40% of the total bill, averaging between $1,500 and $4,000, depending on:
- Location: Labor rates vary regionally (urban vs. rural areas).
- Furnace type: Gas systems often cost more to install than electric ones.
- System upgrades: Replacing old ductwork, thermostats, or wiring adds costs.
- Home accessibility: Attic or crawl space installations increase difficulty (and price).
A straightforward furnace replacement with no duct modifications may cost around $1,800 in labor, whereas a complex retrofit with ductwork redesign could exceed $4,500.
Hidden Costs and Fees to Expect
Beyond the sticker price of the furnace and installation, several hidden costs can surprise homeowners. Being aware of these helps you budget accurately.
a. Ductwork Replacement
If your ductwork is outdated or leaking, it can severely impact your heating system’s efficiency, potentially reducing it by up to 30%. This inefficiency not only leads to higher energy bills but also creates uneven heating throughout your home. Replacing ducts can add an estimated $1,500 to $3,500 to your total cost, depending on the extent of the replacement needed and the materials used.
b. Permits and Inspections
Local building codes often require permits and safety inspections to ensure that your new furnace installation complies with safety regulations and standards. These permits are crucial for avoiding fines and ensuring that your system operates safely and efficiently.
c. Electrical or Gas Line Modifications
If you are considering switching from electric to gas heating (or vice versa), this transition may necessitate line extensions or new connections to accommodate the different fuel sources. This process can be complex, requiring skilled labor to ensure safety and compliance with local codes.
d. Thermostat Upgrades
Installing a smart thermostat can significantly improve your home’s energy efficiency by allowing for more precise temperature control and scheduling. These modern devices can help you save on heating bills by optimizing usage based on your habits. However, the addition of a smart thermostat will increase your project cost by around $200 to $400, depending on the model and features you choose.
e. Disposal and Cleanup Fees
When replacing an old furnace, you will also incur costs for its removal and proper disposal. This process is essential not only for safety but also for compliance with local regulations regarding hazardous materials. The fees for old furnace removal and cleanup typically range from $75 to $250, depending on the complexity of the removal and the disposal methods required.
f. Unexpected Structural Work
In older homes, unforeseen issues such as flooring damage or venting repairs may arise during installation, necessitating additional work. These structural repairs can be critical to ensuring that your new furnace operates effectively and safely. Homeowners should be prepared for this possibility, which can add between $500 $1,000 to their overall costs, depending on the extent of the necessary repairs.
Average Furnace Cost by Type
Here’s a general idea of what you can expect to pay, including installation in 2025:
| Type of Furnace | Average Total Cost (Installed) |
| Gas Furnace | $4,000–$8,000 |
| Electric Furnace | $2,000–$5,000 |
| Oil Furnace | $5,000–$9,500 |
| Propane Furnace | $4,000–$7,500 |
| Dual-Fuel Hybrid System | $6,000–$10,000 |
Remember that higher efficiency means lower utility bills over time, a worthwhile trade-off for the upfront investment.
Brand Comparison: What Affects Price the Most
Not all furnaces are created equal. Premium brands cost more but often come with more extended warranties, quieter operation, and advanced energy-saving technology.
Top Brands and Their Average Price Ranges:
- Lennox: $4,500–$9,000 — Leading efficiency and reliability.
- Trane: $4,000–$8,500 — Known for durability and strong warranties.
- Carrier: $4,200–$8,800 — Great energy ratings and quiet performance.
- Rheem: $3,800–$7,000 — Affordable with solid performance.
- Goodman: $3,200–$6,000 — Budget-friendly, reliable option for smaller homes.
Tip: Don’t focus solely on brand; choose a model that fits your home’s needs and ensure professional installation. Even the best furnace will underperform if poorly installed.
Energy Efficiency: The Long-Term Savings Factor
While a high-efficiency furnace may come with a higher initial cost, it offers substantial savings over time that can make it a wise investment. For instance, an 80% AFUE (Annual Fuel Utilization Efficiency) furnace wastes 20% of its fuel, whereas a 95% AFUE furnace wastes only 5%.
If your annual energy bill is around $2,000, switching to a 95% AFUE model could save you between $300 and $400 each year. Over a span of 15 years, these savings accumulate to approximately $4,500 to $6,000, which often offsets the higher purchase price of the high-efficiency unit. This long-term financial benefit highlights the value of investing in more efficient heating solutions.
Government Rebates and Tax Credits
To encourage energy-efficient upgrades, the U.S. federal government and many states offer tax credits and rebates. In 2025, homeowners can claim up to $600 in federal tax credits under the Energy Efficient Home Improvement Credit for qualifying furnace models.
Local utility companies may also offer rebates between $150 and $800 for Energy Star-rated furnaces.
Always check with your installer or visit energystar.gov for current incentive programs in your region.
Maintenance and Lifespan Costs
A furnace typically lasts 15 to 20 years, depending on usage and maintenance.
To maximize its lifespan:
- Schedule annual inspections before winter.
- Change air filters every 1–3 months.
- Clean ducts every few years.
- Inspect thermostats and vents regularly for optimal performance.
Annual maintenance plans cost around $150–$300, but they can prevent expensive breakdowns and maintain energy efficiency.
DIY vs. Professional Installation
While DIY furnace installation may seem like a tempting way to save money, it is not recommended due to the significant risks involved. Improper installation can result in a range of serious issues, including inefficient heating, potential carbon monoxide leaks, voided warranties, and failed inspections.
To avoid these complications, it is crucial to hire a licensed HVAC contractor who possesses the necessary certifications and insurance. Professional installation ensures that your furnace operates safely and efficiently while complying with all local building codes. This not only provides you with peace of mind but also guarantees long-term value from your investment.
Cost-Saving Tips for Homeowners
Here’s how to make the most of your furnace investment while keeping expenses manageable:
- Compare Multiple Quotes: Always get at least three written estimates from certified HVAC contractors.
- Choose the Right Size: Avoid oversizing — it leads to higher costs and shorter lifespan.
- Use Rebates & Tax Credits: Take advantage of local and federal incentives.
- Bundle HVAC Replacements: Replacing your AC and furnace together can lower installation costs by 10–15%.
- Invest in a Smart Thermostat: Save up to 10% annually by optimizing heating schedules.
- Maintain Regularly: Small tune-ups prevent costly future repairs.
Long-Term Value: The True Cost of Ownership
A furnace’s actual cost isn’t just the purchase price — it includes:
- Energy consumption
- Maintenance
- Repairs
- Efficiency savings
For example, a $6,000 high-efficiency furnace could save $400 annually compared to an older unit, paying for itself within 10–12 years while providing better comfort and resale value.
When evaluating options, consider the lifetime operating cost, not just the upfront expense.
Final Thoughts: Is a New Furnace Worth the Investment?
Absolutely, when chosen wisely. A new furnace not only enhances comfort and energy efficiency but also adds value to your home. With average annual energy savings of $300–$500 and improved air quality, the investment pays off in comfort, safety, and lower long-term expenses.
Quick Recap
- Average Cost (Installed): $3,500–$9,500
- Most Common Type: Gas Furnace
- Efficiency Rating (AFUE): 80–98%
- Lifespan: 15–20 years
- Long-Term Savings: $4,000–$6,000 over furnace lifespan
- Best Strategy: Choose a high-efficiency model with a trusted installer
Conclusion
So, how much does a new furnace cost? While the upfront investment may seem steep, the combination of improved comfort, lower utility bills, and long-term reliability makes it well worth the price.
Whether you’re replacing a decades-old system or upgrading for efficiency, understanding equipment costs, labor fees, and hidden expenses helps you make an informed, confident decision. In the end, a properly installed, energy-efficient furnace doesn’t just heat your home, it warms your wallet, too.
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FAQs
Electric furnaces are usually the most affordable, with prices starting around $2,000, including installation. However, they can be more expensive to run due to higher electricity costs, making them less cost-effective in colder climates.
Installation usually costs between $1,500 and $4,000, depending on the project’s complexity. Costs increase if ductwork, electrical wiring, or gas lines need modification.
Switching from an older 80% AFUE model to a 95%+ AFUE high-efficiency furnace can save $300–$500 per year on energy bills, totaling thousands in savings over the furnace’s lifespan.
To cut costs, get multiple quotes, take advantage of rebates, and choose a high-efficiency model for long-term savings. Pairing your furnace replacement with a smart thermostat and annual maintenance plan can reduce future expenses and extend the system’s lifespan.
