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Thinking of a furnace replacement? If your old furnace is frequently breaking down or requires costly repairs — a new one is definitely on the cards. And, with the advancement in technology, your new furnace will be more efficient, last longer, and most importantly reduce your heating bills significantly.

And, it will be a big relief that you won’t have to keep calling the repair technician every second day. When it comes to replacing your old furnace, you want your new equipment to deliver comfort to your home while minimizing your home energy costs

This article will explore all the aspects of a furnace replacement including considerations to keep in mind before buying a new furnace, types of furnaces, their pros and cons, and the various cost factors involved. 

So, if you’ve decided to go for a furnace replacement, we will advise you to begin your research asap so that your new HVAC system (heating, ventilation, and air conditioning) is in place before the winter season.

Planning a renovation for your house? Try our free home remodel cost estimator; it’s easy and convenient to use!

The next step will be to consult a licensed professional to help in the furnace replacement or to install a furnace. A pro will evaluate your home and determine the most cost-effective (and best) way to heat (or cool) it.

Replacing a furnaceFurnace 081031 011, by Dwight Sipler on flickr [CC BY 2.0]

But first, let’s explore some of the warning signs that you need to replace your old furnace:

7 Signs that you need furnace replacement

  • Your furnace is more than 12 to 15 years old.
  • It doesn’t give sufficient warmth anymore.
  • It requires frequent repairs.
  • Your energy bills are increasing day by day. 
  • The heating unit emits unusual sounds or switches on/off irregularly.
  • You can feel low indoor air quality. 
  • You’re experiencing respiratory issues or foul smells inside the house.

Factors to keep in mind before buying a new furnace

While deciding on the ideal type of furnace to get, you’ll need to keep in mind many factors. These include: 

  • Furnace efficiency

The first quality you want in your new furnace is that it should be energy efficient.  The heating ability of a furnace is measured in British Thermal Units (BTUs). Simply put, it refers to the amount of heat that’s required to raise the temperature of one pound of water by one degree Fahrenheit.

A furnace’s BTU will show how many units of heat your furnace will produce at 100% efficiency. Here’s a little Math for you — to find the exact BTUs of your furnace, multiply the input BTU by the efficiency % and you will get the output BTU. 

While older furnaces were often rated 80 percent efficient or less (despite running on full power), the newer models are rated 90 to 95 percent range. Also, most of them are two-stage models — capable of running at 65 percent first and then ramping up to 95 percent. You can also find high-efficiency furnaces which are three-stage models and are understandably more costly.

This jump in efficiency means a decrease in utility costs. So, even if your furnace uses expensive fuel, its high efficiency will save you money in the long run.

Want to find the cost savings of an energy star rated high-efficiency furnace? Simply, multiply your monthly electric bill by the difference in the efficiency of your old and new furnace.

If you are planning to install a new HVAC unit, feel free to use our estimator tool to see how much the installation cost would be!

  • The ideal furnace size

Most average-sized homes usually require 30 to 60 BTUs per square foot. Having said that, you need to keep in mind that you must choose the BTUs according to your living space. 

Units with higher BTU efficiency ratings aren’t necessarily better for smaller houses. Firstly, they cost more and secondly, they hit ideal temperatures too quickly — shutting off more often.

Whether your home needs more or fewer BTUs depends on the total square footage of your space, your climate zone, or where your home is located. 

  • The different types of furnaces: pros and cons

Gas furnacePhoto by Muggle99102 from wikimedia commons [CC BY-SA 3.0]

When it comes to different types of furnaces, you have the following options: 

Furnace type Cost Pros Cons
Gas furnace $1,200 to $2,500
  • Cheap to buy and install
  • Minimum repair issues
  • Heats up a home faster than an electric furnace
  • Most popular option
  • Ideal for areas with harsh winters
  • Uses gas wisely in an HVAC system
  • Lasts 10 to 20 years
  • Regular maintenance and monitoring needed for safety concerns
  • Tends to release low levels of carbon monoxide fumes
  • Complicated installation, especially if you don’t have existing natural gas lines
Electric furnace $700 to $2,000
  • Cheapest to buy and install
  • Quick installation
  • Runs quietly
  • Requires minimal repairs
  • Performs better in areas with moderate climates
  • Doesn’t release carbon monoxide fumes
  • lasts 20 to 30 years
  • Takes longer than a gas furnace for heating air in your living space.
  • Doesn’t transfer heat
  • Running it can be expensive
  • Uses a lot of power when warming up your home
Oil furnace $1,900 to $6,000
  • Creates 140,000 BTUs of heat per gallon
  • Heating oil tends to be more environmentally friendly than natural gas
  • Lasts 16 to 20 years
  • Requires fuel storage on your property
  • May release carbon monoxide fumes
  • Needs regular maintenance
  • Running is expensive


Some other furnace options include green furnaces that are environmentally friendly. They not only help keep the air clean but also save you a considerable amount of money. These include solar panels and geothermal furnaces. 

An electric heat pump, for instance, is efficient and uses less electricity. It easily transfers heat in the house and may even offer thermal storage. 

The only downside is that these eco-friendly choices come with high upfront costs. It takes longer for homeowners to recoup their initial investment, sometimes even over the life of the house. Interestingly, the government offers a 30% tax credit for some of these green heating systems in order to promote their usage.

Whichever furnace you opt for, keep in mind that there will be other associated costs to factor in. These include: 

Furnace replacement costs

Furnace roomFurnace room by Shakespeare at the English language Wikipedia [CC BY-SA 3.0]

While thinking of replacing your existing heating system, you need to keep the furnace replacement costs in mind. 

On average, the cost to replace a furnace ranges from $1,000 to $13,000. This amount depends on the type of furnace you choose (the fuel it uses), your zip code, and labor charges. 

Here are the approximate total installation costs of the most popular options: 

  • Gas furnace: $2,000 to $10,000
  • Electric furnace: $1,200 to $7,000
  • Oil furnace: $4,500 to $7,000
  • Geothermal pump: $3,000 to $30,000

Labor costs 

A professional furnace installation will cost you between $150 to $500 as labor charges alone. This kind of work is typically done in one day and usually requires two technicians at a rate of $50 to $100 per hour

If you have additional work such as installing new ductwork, it will cost you a lot more.

Ductwork installation costs

Installing new ductwork will need you to shell out an additional $3,000 to $5,000 or more. Your new heating system needs well-installed ductwork, vents, and filters. If you just want to get the ducts repaired, it will cost you about $1,000 to $5,000

Duct installation or repair costs will depend on the number of stories, intake or output vents, and the temperature-control zones your house has.

Furnace replacement permits and inspections

Home furnaceFurnace & water heater, by Justin Baeder on flickr [CC BY 2.0]

Most building permits regarding a furnace cost between $400 to $1,500. You can add to it additional furnace inspection fees of $100. The exact amount will depend on your geographical location. Both measures are absolutely crucial in ensuring that your heating equipment operates safely. 

Last words 

You definitely need a new furnace if your old one is suffering frequent breakdowns or requires costly repairs ever so often. 

If in doubt, remember a good rule of thumb. If your old furnace is beyond three-quarters of its life expectancy and if any repair work is costing you more than a third of the furnace replacement cost — it’s time to buy a new one.

While choosing a new furnace, make sure it’s energy-efficient, durable, requires minimal maintenance, and leaves behind a smaller carbon footprint.  

How to Choose the Right Furnace for Your Home

A Complete Guide on Furnace Replacement and Its Cost Factors was last modified: November 7th, 2019 by Ramona Sinha
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