How Much Does It Cost To Install A Furnace?

Reviewed by Carol J Alexander remodeling expert. Written by Fixr.com.

If you don't have a heat pump, you may have a forced hot air furnace to heat your home. If not electric, a furnace can use various fuels to produce heat: natural gas, propane, or oil. The furnace circulates the heated air through ducts and vents in each room. The cost of a furnace varies depending on certain factors attributed to the type of unit you have.

In this guide, we walk you through the factors that influence the cost of a furnace installation, what size furnace you need for your home, and how to pay for this home improvement project.

The average cost of a furnace replacement

The average furnace replacement cost is between $2,372 and $4,414. Most homeowners pay around $3,280 to replace an existing high-efficiency furnace that heats a 2,000-square-foot home. On the low end, they replace an electric furnace to heat a 1,000-square-foot home for $895. On the high end, a high-efficiency gas furnace to heat a 4,000-square-foot house will cost $3,680, on average.

All these costs assume adequate ductwork and fuel lines are already in place and don't need significant repairs. However, when installing a new system that includes a furnace, ductwork, fuel tank, and lines, homeowners can spend as much as $10,000.

Cost to install a furnace

What a new furnace installation could look like

Several factors influence the cost of installing a new furnace, which we discuss below. All these options may or may not apply to your situation. But to offer a picture of what this project could entail for a 2,000-square-foot house, we break down the overall cost for you below.

• Furnace install – $3,280
• Ductwork – $1,436
• Fuel lines – $601
• Fuel tank – $1,155
• Total cost – $6,472

Factors that influence furnace installation costs

When estimating a furnace installation cost, the HVAC technician considers several factors, including the type of furnace, its size and the home's size, and the labor costs are just a few. Here, we look at each one individually.

Fuel source

What powers your furnace will influence the installation cost. Typically, an oil furnace will cost more than an electric furnace for the same size home. The following chart can help you determine the type of furnace you can afford and the kind of fuel it uses.

Cost range of furnaces by type*

*Range indicates units sufficient for homes from 1,000 to 3,000 square feet.

Previous furnace type

If you're replacing an existing furnace, the cost will be less because some essential components, like ductwork, are already in place. However, if you're replacing something like electric baseboard heat with a gas furnace, the cost will be higher due to the need for ductwork installation, running gas lines, installing a gas tank, and more. The most economical way to replace your heating system is to replace it with the same type of system.

Home/furnace size

How much energy a furnace uses to heat your home is measured by British Thermal Units (BTUs) or tons. One BTU equals the energy required to increase the temperature of one pound of water by one degree Fahrenheit. A one-ton capacity unit equals twelve thousand BTUs.

In addition, furnaces are rated by the Annualized Fuel Utilization Efficiency (AFUE). This rating indicates the percent of heat produced for each dollar of fuel consumed. The higher the AFUE rating, the lower your energy costs.

Multiplying the home's square footage by 30 BTUs gives you the furnace size needed. For instance, a 1,000-square-foot house requires a 30,000 BTU output. However, other variables can apply, like your climate zone. Homes in a cold region require more output per square foot than homes in warm zones.

To more accurately determine the size of the furnace you need, multiply your home's square footage by the BTU range indicated on the above map for your climate zone. The higher the BTU, the more expensive the furnace.

Furnace location

Where the furnace is installed in the home could affect the cost. For instance, if the area is hard to reach and move around in, and the installation takes additional time because of space constraints, it will add to the labor costs.

Labor

Depending on your location, HVAC installation technicians charge $86 to $161 per hour.

Removing an old furnace and replacing it with a new one takes about 10 hours, on average. However, when installing a gas line, new ducts and vents, or a new fuel tank, the work takes longer and increases the labor cost. 

Furnace installation pricing tiers

Installing a new or replacement furnace is a costly home improvement project. If you’re wondering if you can afford to install a new one this year, we’ve broken the project into three pricing categories. Find one that fits your budget so you know how much to save.

Budget-friendly furnace installation

Homeowners on a budget can install a new furnace for $1,000 to $2,500.

If you're on a strict budget, the most cost-effective installation is to replace your furnace with one of the same type. That is if all the extraneous components like ductwork and fuel lines don't need repairing or replacement. So, if you have an oil furnace, get another oil furnace. 

On the other hand, if you have an oil furnace and its running cost is prohibitive, you can afford to install an electric furnace and use the existing ductwork. Or install a heat pump and get air conditioning into the bargain.

Mid-range furnace installation

Homeowners with a mid-line budget can install a new furnace for $3,000 to $5,000.

With more money, homeowners can install a new high-efficiency gas furnace and 30 feet of ductwork in their 2,000-square-foot home. But if no fuel tank and lines exist, they must install an electric furnace or go over budget. However, with existing ductwork and fuel setup, they can afford a new furnace for a larger home.

High-end furnace installation

The average price for a high-end furnace installation is $5,000 to $10,000.

If your home has no furnace, ductwork, or fuel lines, you can afford to install all the components and keep within this budget category. Homes that fall into this category because they need additional work or materials include

• Sprawling ranches, which require more ductwork
• Homes in cold regions that need a higher BTU output
• Luxury homes where you want a propane tank a greater distance from the house

Signs you may need a new furnace

Most modern HVAC systems last 15-20 years. With proper maintenance, it may even last a little longer. But, if your unit is struggling, you may want to upgrade. Besides blowing cold air, there are signs your furnace may need to be replaced – especially if it's at the end of its lifespan. If you experience any of these issues, it's time to call an HVAC professional.

• Increased utility bills
• Constant cycling on and off
• Noises like squealing, knocking, or whistling must be investigated
• Unusual odors or the smell of fuel
• Leaking water
• The carbon monoxide detector alarms
• A gas unit has a yellow pilot light

Unsure what type of furnace you want? See our comparison of gas vs. electric furnaces.

Furnace repair vs. replacement

To help you decide between replacing or repairing your unit, an HVAC technician discusses the possibilities based on the cost and the age of the system.

If the furnace is repairable, you may want to prolong replacing it for as long as possible. However, replacing units that have reached their projected lifespan may be less costly.

Units under ten years old shouldn't need a major repair. But sometimes, things happen. If the system is still under warranty, a technician can discuss why it needs repairing at this time and if it's a possible warranty claim. 

Additional cost factors to consider

Ductwork

The average cost to install ductwork in a house is $28 to $48 per linear foot.

Whether you're installing a new forced hot air system or updating an older one, you need to install or replace the ductwork as well. The cost to install ductwork varies depending on the needed length, number of branches and vents, insulation, and other materials. Also, duct installation in a completed home costs more than in new construction because the installers must work in tight quarters like a crawl space and attic. 

Fuel lines

The cost to run gas or oil lines from the source to your furnace is $9 to $27 per linear foot. Installing a 250-gallon oil or propane tank costs $605 to $1,548.

If you don't install an electric furnace, the alternative uses a type of fossil fuel. Installing the gas or oil lines and tanks and connecting everything adds to the project's overall cost.

Permits and inspections

Some areas require a permit to install a new furnace. This process ensures a safety inspection is performed after the installation. Typically, a building permit costs a percentage of the total job. Ask your HVAC company or local building official if you need a permit and the cost. 

Geographic location

Material costs and labor for any home improvement project vary by location, including a furnace installation. Prices are typically higher in urban areas than in rural areas. For instance, the average cost to install a furnace in Chicago is $4,505. Whereas the average cost in Topeka, Kansas, is $2,821. Check with a local HVAC company for the best prices in your area. 

Can I install my furnace myself?

If you're a DIY enthusiast, you may be tempted to save money on labor and install your own furnace. We advise against that for several reasons.

• Self-installation could void the warranty.
• The consequences of an error can be lethal.
• If you pull your own permit and the installation fails inspection, you'll have to redo it. Doing it over could cost you as much money as you were trying to save.
• HVAC technicians have specialized training so they don't make those errors.
• HVAC technicians have experience working on hundreds of units from different manufacturers, so they know what to do in every possible scenario.
• You can't learn everything they know from watching YouTube videos.
• Professionals have easy access to systems and parts.

How to pay for your furnace installation

Most homeowners face the task of replacing a furnace at least once. So, it makes sense to start saving for one beforehand. However, if your teeth are chattering in the dead of winter and you don’t have the cash to cover the cost of a new furnace, there are other ways.

First, consult with a lender to see what your options are. If you've been in your home long enough to accrue some equity, they may recommend a home improvement loan or a home equity line of credit (HELOC). With a loan, you receive a lump sum of money and pay it back with interest every month. With a HELOC, you withdraw money from the account, much like a credit card. You can make as many withdrawals as needed as funds allow until the draw period ends. At that time, you must begin repaying the debt. Both types of credit use your home as collateral, so you must repay to avoid losing your home. 

Finally, ask the HVAC company if they offer payment plans. If they do, compare the interest rate with those of the bank options to see where you can get the best deal.

Ways to save on a new furnace

To save money on your new furnace, consider tax credits and rebates to offset the upfront cost. Ask your HVAC contractor for the best home furnace with an Energy Star rating. Energy Star-rated appliances are typically high-efficiency models that will lower your energy bills, saving you money in the long run. 

Let's get toasty

Now that you understand the price ranges for a furnace installation, you're ready to get started on this home improvement. Let us match you with an HVAC company near you. Because to be as warm as a bug in a rug, you need a total project cost that's right for your region of the country.