How Much Does a New Furnace Cost?

0 comments

By Alex Lane | Your Home Comfort Advocate

Upgrading or replacing your furnace isn’t exactly a small-ticket item—but it also doesn’t have to be a financial mystery. Whether you’re prepping for winter or your old unit’s on its last leg, knowing how much a new furnace costs in 2025 will help you plan, budget, and save smarter.

In this homeowner-friendly guide, we’ll break down furnace prices by fuel type, explain what’s included in installation, unpack hidden costs, and share tips on how to get the most heat for your hard-earned money.

Let’s dig in.

🔥 Average Cost of a New Furnace in 2025

Prices vary depending on size, efficiency, and the type of system you're installing—but here’s what most U.S. homeowners can expect:

Furnace Type	Cost Range (Installed)
Gas Furnace	$3,800 – $6,000
Electric Furnace	$2,000 – $4,000
Oil Furnace	$4,000 – $6,500
Heat Pump	$4,500 – $8,000

These figures include both equipment and basic installation. But keep in mind: location, ductwork needs, and upgrades can push you above or below these averages.

According to Angi’s 2025 furnace pricing data, gas furnaces remain the most common choice due to affordability and heat output, while electric furnaces offer lower upfront prices but may cost more to run long-term depending on utility rates.

🧰 What’s Included in the Price?

A furnace replacement quote usually includes:

New furnace equipment (blower, heat exchanger, cabinet, etc.)
Removal of old unit
Labor and basic installation
Standard connections to existing ducts and vents
Basic thermostat hookup

Some companies may roll in a maintenance plan or warranty extension—so it’s smart to ask.

💡 Key Factors That Affect Furnace Costs

1. Furnace Size and BTU Output

Your furnace size should match your home’s heating load. Too big, and you waste money on equipment and energy. Too small, and you’ll be shivering all winter.

Most homes need a furnace rated between 40,000 and 120,000 BTUs, depending on square footage, insulation, and climate.

📘 Pro Tip: Ask your installer to run a Manual J load calculation for accuracy. Don’t guess based on square footage alone.

2. Efficiency Rating (AFUE)

Furnaces are rated by AFUE—Annual Fuel Utilization Efficiency. The higher the AFUE, the more of your fuel dollars go toward heating your home.

80% AFUE: Baseline efficiency (standard models)
90–98% AFUE: High-efficiency models (may qualify for rebates)

Energy.gov recommends choosing ENERGY STAR-rated furnaces for colder climates where the energy savings really add up over time.

3. Brand and Warranty

Top brands like Carrier, Lennox, and Trane often cost more but come with longer warranties and more reliable parts. Budget brands may cut upfront costs but could cost more in maintenance or early replacement.

4. Ductwork Condition

If your ductwork is old, undersized, or leaky, it can reduce system performance—and cost you extra. Duct repairs or modifications can add $500–$2,000 to your project depending on complexity.

🛠️ Installation Costs: What’s Included?

Labor costs for furnace installation range from $500 to $2,500, depending on:

Your location: Urban and coastal areas usually see higher labor rates.
Accessibility: Tight crawlspaces or attics increase difficulty.
Permits and inspection fees: Some states require $100–$500 for permits.
Code upgrades: Older homes may require added safety features or electrical work.

According to Carrier, the average cost to replace a furnace ranges from $4,500 to $6,000, depending on your home’s size, system efficiency, and installation complexity. That figure typically includes both the equipment and professional labor—though custom ductwork, advanced thermostats, or code upgrades may push costs higher.

💸 What Can Drive the Price Higher?

Here are some often-overlooked expenses that catch homeowners off guard:

Electrical upgrades: Needed for electric furnaces or smart thermostats.
Thermostat replacement: Smart thermostats can cost $150–$400 installed.
Ventilation upgrades: New flue pipes or venting may be required for high-efficiency units.
Old furnace disposal: Sometimes billed separately if not bundled.

✅ How to Get the Best Value for Your Money

Here’s what I tell homeowners all the time—price matters, but value matters more. Focus on long-term reliability and energy efficiency.

Ask These Questions Before You Buy:

Is the furnace properly sized for my home?
What’s the warranty coverage (parts AND labor)?
Does this qualify for local rebates or tax incentives?
Can I bundle this with a new AC or duct upgrade for savings?

HVAC.com recommends getting at least 3 written estimates from licensed HVAC contractors, and checking for ENERGY STAR labels when comparing models.

⚖️ Gas vs. Electric Furnace Costs (Quick Preview)

Gas and electric furnaces differ in more than just price—they heat differently, have different energy costs, and operate under different safety considerations.

Gas furnaces cost more upfront but are usually cheaper to run, especially in colder climates.
Electric furnaces are more affordable to install and safer to maintain, but often come with higher monthly energy bills depending on your utility rates.

Each has its place depending on your region, fuel availability, and long-term energy goals. We'll break down the full comparison later in this guide series.

🏆 Furnace Rebates and Tax Credits in 2025

One of the best ways to lower your furnace cost? Take advantage of federal, state, and utility rebates—especially for high-efficiency models.

As part of the Inflation Reduction Act and other clean energy programs, homeowners can claim:

Up to $600 in federal tax credits (25C)
Utility rebates for ENERGY STAR models
Low-income support in select states

You can check what’s available in your area with the ENERGY STAR Rebate Finder.

💬 Final Thoughts from Alex Lane

A new furnace is a big investment—but it’s one you’ll live with for the next 15–20 years. Take the time to size it right, compare efficiency ratings, and explore rebates before signing any contract.

If your budget’s tight, start by comparing models in your price range and ask about financing options. A slightly higher upfront cost on a high-efficiency model can often pay for itself in energy savings—and peace of mind—within a few short winters.