How Much Does It Cost To Replace A Furnace In 2022?

Tom Gaffey
by Tom Gaffey

When you start to notice your home furnace is acting abnormally, you might start to picture your savings account shrinking. While your furnace may have lasted 20 years or longer, the cost of a new one can be quite painful, especially in 2022 with energy costs and inflation soaring. With so many new furnace options, add-ons, and potentially hidden fees, you might even struggle to understand exactly how much it will cost to replace your furnace.

It will cost between $3,500 to $8,000 to replace your furnace. The size of your home, your choice of a high efficiency versus a moderate efficiency furnace, and choosing a gas or electric furnace all have impacts on cost. The installation is the largest variable expense in furnace installation, and varies significantly based on labor costs and the amount of additional work needed in your home during the install.

When you start to cost out your furnace replacement, you will quickly learn there are many considerations to factor in when calculating price. In order to get an accurate picture of how much money to allocate to a new furnace install, you need to make several decisions and weigh some long-term versus short-term cost factors.

Six Factors To Consider When Costing Your New Furnace

1. The Type Of Energy The Furnace Uses

The type of energy your furnace uses has an impact on its cost, both in replacing it and in the long term. Be aware of the differences in cost between gas, electric, and even oil furnaces.

2. High Efficiency Versus Moderate Efficiency

Furnaces now generally come in two different categories of efficiency. There are moderate efficiency and high-efficiency furnaces. These types have two very different price tags, but also different long-term results.

3. Size Of Your Home

The size of your home has a major impact on how much energy is needed to heat it. This also means your furnace size and strength will vary based on the size of your home. The larger the home, the more powerful (and likely more expensive) the furnace.

4. How Advanced The Equipment Is

Like with most home appliances, furnaces come in a wide range of capabilities and technologies. The price of your furnace will vary based on how many features it has, including speed options and other sophisticated and “smart” technology.

5. Your Climate

Your climate dictates not only how strong of a furnace you will need, but also how hard it will have to work. The severity of your winters and humidity all factor into how strong of a furnace you need to combat these conditions without putting too much strain on the machine.

6. Installation Costs

Installation costs are by far the biggest factor to consider when budgeting for a furnace replacement. In fact, installation costs can cost just as much or even more than the furnace unit itself. You should know why installation is so expensive so you can get an accurate picture as to how much your installation is likely to cost.

Reasons Why Furnace Installation Is So Expensive

There are several reasons furnace installation is 40% to 60% of the total price of the furnace replacement. Once you understand the different reasons for costs associated with furnace installation you can budget accordingly. You might even find ways to save on your install.

Requires High-Level Professional Skill

Furnace installation is not like screwing in a light bulb. It is a very involved process. For this reason, those who install furnaces are often licensed, and are not simply handymen types.

Installing a furnace can also be quite dangerous. The installation process involves moving heavy equipment, working with live wires and potentially working with natural gas lines (maybe even installing one). Your installation professional likely needs certain levels of insurance to perform these tasks, which makes the rates higher.

Furnaces Are Complicated

Furnaces are complicated. This is why most people do not install them on their own. Because furnace replacement is complicated, they take time to install. The longer an installation, the more labor hours you have to pay for. Remember there is setup work, removal, potential additional installation and the installation of the heavy furnace itself. This takes time and understanding – and therefore a large price tag.

May Require Additional Work Other Than Furnace Installation

Your furnace installation may require more than just installing a furnace. For example, if you decide to move from an electric system to a gas system, a gas line needs to be installed. This is a fairly complicated and expensive process.

You may also require some ventilation or new and improved duct work. While all of these modifications will greatly improve your heating system, they will tack on additional charges to your already-high installation bill.

Three Furnace Categories, Their Cost, And Features

When you are in the market for a new furnace, you will essentially choose a furnace from one of three tiers. The three tiers (or levels) or furnaces are: entry-level, mid-range level, and high-end Level furnaces. To get a better understanding of how much each type costs these days, and what is included in that price, read the detailed descriptions below.

Entry-Level Furnace

An entry-level furnace will cost you between $3,000 and $5,000. The exact price varies based on the size and model of the exact furnace you select. The installation price may change a bit based on what additional modifications are required.

An entry-level furnace is popular for those who are looking for a reliable furnace but are cost conscious. An entry-level furnace is a “single stage” furnace. This means it has only an on and off switch. There are no additional burn levels. An entry level furnace works for those on a budget looking for a furnace that works well, and also for those in mild climates who have limited furnace needs.

Mid-Range Furnace

A mid-range furnace will currently cost you between $3,500 – $6,500. The exact price will depend on your installation needs and the exact model you select. The biggest difference between the entry-level and mid-range furnaces, other than the price, is the fact that mid-range furnaces have more features. These features include a “two stage” gas valve.

A Two stage gas valve allows your furnace to operate at low fire and high fire temperatures. This gives you flexibility on how you heat your home and make yourself comfortable. Mid-range furnaces are popular as they give you a good deal of options at an approachable price.

High-End Furnaces

High-end, or top of the line furnaces, range anywhere from $4,300 all the way to $8,000 and higher. The exact price of a high-end furnace depends on exactly how many advanced features your furnace has, and also the equipment within the furnace itself. High-end furnaces are often made to be very energy efficient. This means that they maximize the energy they use, which cuts down on energy costs long term. They are, however, much more expensive at first.

There are also a variety of additional features when it comes to high-end furnaces. They can include variable speed blowers, and also whisper quiet technology – meaning you don’t hear a loud sound every time your furnace kicks on and off.

These features can show some real cost saving in the long term, but this technology will cost you more up front. If, however, you are looking for the best that money can buy, this is a good choice for you. If you plan to live in the home for a long time (20 years or more) this might also be a good choice. After all, over time, you will slowly enjoy the cost-saving benefits of the high end furnace.

High Efficiency Furnace vs. Moderate Efficiency Furnace

Another way furnaces are classified are “high efficiency” versus “moderate efficiency.” These terms are used to describe how effective your furnace is at turning energy into heat. This efficiency is called “annual fuel utilization efficiency” or AFUE. The AFUE is a percentage, showing what percent of the fuel goes towards heating the home, and what percent is wasted as exhaust.

Moderate Efficiency Furnaces

A moderate efficiency furnace is normally the entry level of efficiency available when you are looking to purchase a new furnace. Efficiency standards have been established, and very few furnaces have efficiency lower than 75% unless they are old. Moderate efficiency furnaces are considered to have a standard efficiency of 80% AFUE. This means 80% of the fuel goes towards heating your home, and 20 percent is lost. A moderate efficiency furnace is likely to cost between $3,000 and $5,500.

High Efficiency Furnaces

High efficiency furnaces, not surprisingly, are more efficient than moderate efficiency furnaces. As a rule of thumb, these furnaces provide an efficiency of 90% AFUE or higher. This means only 10% or less of the fuel is lost, with the rest of the energy going directly towards heating your home.

It is important to understand the difference between the two, as there is often a large difference in price point. High efficiency furnaces often cost much more (25% to 50% more) than moderate efficiency furnaces. These furnaces are likely to cost between $3,500 to $8,000.

However, if you do the math, you may find that a high efficiency furnace might quickly start saving you money in energy and costs, making it the cheaper option. The colder the climate and higher the need for heat, the more likely you can benefit from a high efficiency furnace.

Electric Furnace vs. Gas Furnace Costs

Electric Furnaces

Electric furnaces are a common option for those with no access to gas, or for those who live in milder climates. It is common to pair an electric furnace with a heat pump, which is a popular option for those in mild climates.

Electric furnaces are also much less expensive than gas furnaces initially. They are also very easy to install compared to gas furnacesThey are, however, much less efficient than gas furnaces, as they are less energy efficient and often less powerful. Between the two types of furnace, electric furnaces tend to last longer, up to 30 years, compared to gas furnaces (20 years).

Gas Furnaces

Gas furnace can cost twice as much as an oil furnace, and three times as much as an electric furnace. This initial sticker shock may make you want to steer clear of gas furnaces. It is important to remember, however, that these furnaces save you money over time.

Gas furnaces are also very complicated to install, which means the professional installation costs will add to an already-high initial cost. They are, however, the better option in colder climates when heat is a common necessity, as they will quickly save money over time, and heat your home better.

Keep Your Eye Out For Tax Credits And Rebates

While your new furnace will certainly set you back thousands of dollars no matter the route you choose, you might be able to find some savings if you know where to look.


From time to time, installation companies and furnace manufacturing companies will offer discounts on their products and services. These discounts often come in the form of rebates. These offers are often for a limited time. Therefore, it is best to do your research on when the furnace you are eyeing is likely to go on sale.

Tax Credits

Federal tax credits are sometimes given if you buy an energy efficient furnace. These offers do not exist every year, as they often change based on the current political climate. It is, however, worth looking into and finding out the possible requirements before you make your purchase.

Final Thoughts On How Much Replacing Your Furnace Costs

When you cost out a new furnace, you have to consider several factors. Remember that regardless of the furnace price, the installation could cost you anywhere from 40% to 60% of the total replacement. Remember that although high efficiency furnaces cost more at first, they will save you money over time, and you might even be eligible for a tax credit or rebate. Electric furnaces last longer and are cheaper, but gas furnaces will save you in the long run if you live in a colder climate.

Tom Gaffey
Tom Gaffey

Tom Gaffey is an expert writer who currently resides in Washington D.C. Tom has a passion for real estate and home improvement writing, as well as travel and lifestyle writing. He lived the last twelve years in Hawaii where he worked closely with luxury resorts and event planners, mastering his knowledge of aesthetics and luxury products. This is where he found his passion for home improvement and a keen interest in DIY projects. Currently, Tom resides in Washington D.C, and also working on his debut fiction novel.

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