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Oil Furnace Installation Cost

Oil Furnace Installation Cost

National average
(new mid-grade oil furnace with a tank and oil line installed)
Low: $2,850

(direct replacement of a standard furnace with minimal adjustments)

High: $11,000

(new high-efficiency furnace with a new tank, oil line, vent, and drain, cleaned and sealed ducts)

Cost to install an oil furnace varies greatly by region (and even by zip code).
Get free estimates from air-conditioning and heating contractors in your city.

The average cost of installing an oil furnace is $6,000.

In this guide

Oil Furnace Costs by Brand
Oil Furnace Sizes
Labor Costs to Install an Oil Furnace
Factors Affecting the Cost to Install an Oil Furnace
How Much Does It Cost to Run an Oil Furnace
Oil Furnace Replacement Costs
High-efficiency Oil Furnace Prices
Converting an Oil Furnace to an Electric Heat Pump Cost
Propane vs Oil Furnace
Oil Furnace vs Gas Furnace
Oil Furnace Maintenance
Mobile Home Oil Furnace Prices
Enhancement and Improvement Costs
Additional Costs and Considerations

How Much Does It Cost to Install an Oil Furnace?

Oil is one of the most readily available heating sources in the U.S. Even in areas where natural gas or propane are used less, oil is still a viable option, offering better and more consistent heating than electricity, particularly in cold climates.

Oil furnaces come in many sizes with a number of efficiency options, creating a range of costs for installation. The average cost range for an oil furnace installation is between $5,000 and $9,000, with most people paying around $6,000 for a 90% AFUE oil furnace installed in a 2,000sq.ft. home with a new oil line and tank.

Oil Furnace Prices

Oil Furnace Installation Costs
National average cost$6,000
Average range$5,000-$9,000
Minimum cost$2,850​
Maximum cost$11,000​

Oil Furnace Costs by Brand

Oil furnace costs vary depending on the brand. Standard brands tend to cost less and are rated for 15 - 18 years, while premium brands last up to 25 years, have better energy efficiency, and cost more. The following are some of the common brands frequently installed:

Oil Furnace Costs

Oil Furnac Costs

BrandAverage Costs
Comfort-Aire$1,850 - $3,000
Thermoflo$1,900 - $3,500
Century$2,000 - $4,000
Rheem$2,200 - $4,200
Adams$3,100 - $5,000
Kerr$3,250 - $5,500

Oil Furnace Sizes

Like all furnaces, oil burners come in a wide range of sizes, so they heat homes of all sizes in all climates. It is important to choose the right furnace size for your home. A furnace that is too small turns on too frequently and wears out quickly, struggling to produce enough heat. A furnace that is too large also wears out more rapidly while costing you more in energy bills.

To determine the correct size of oil furnace you need for your home, calculate the home’s square footage and determine what zone your house is in. Consult the U.S. Energy Information Administration’s climate zone map to determine your zone number. Multiply the length and width of each room in your home that you heat and add up all the rooms together to get your total square footage.

Heating zones range from 1 - 5, the hottest parts of the country in zone 1 and the coldest in zone 5. Each zone has a range of BTUs or British Thermal Units per square foot that the furnace needs to produce to heat your home effectively.

What Size Oil Furnace Do I Need

ZoneBTUs per Square Foot
130 - 35
235 - 40
340 - 45
445 - 50
550 - 60

Insulation also plays a role in how many BTUs per square foot your home needs. If you have less insulation, select the higher BTU number. If you find yourself between furnace sizes, size up roughly 10% - 20%, but try not to go more than 20% larger. Your HVAC technician will help determine the correct number.

The following table includes a range of the average BTUs needed for various-sized homes located in zone 4.

Oil Furnace Size Calculator

Oil Furnace Size Calculator

Square FeetBTUs
80036,000 - 40,000
1,00045,000 - 50,000
1,20054,000 - 60,000
1,50067,500 - 75,000
2,00090,000 - 100,000
2,500112,500 - 125,000

Labor Costs to Install an Oil Furnace

Many components go into installing an oil furnace, which impacts the total cost. If this is a new furnace installation, the technician needs to install the furnace, create a vent, install an oil line, and install the oil tank. This costs around $2,000 in labor and additional costs for parts beyond the furnace itself.

Older furnaces produce a lot of soot, meaning even replacements have high labor costs of $1,000 - $1,500 to clean out the existing vents and ducts to install the furnace properly. The average installation is $2,000 for labor out of the $6,000 total.

Factors Affecting the Cost to Install an Oil Furnace

Many factors impact the cost of your furnace installation, including the brand, furnace size, whether it is a new installation or replacement, and the furnace location. Upgrading to a more efficient furnace increases your costs for the unit and installation because efficient furnaces condense as they heat, meaning that they need a drain to prevent flooding when the furnace runs.

Some high-end brands cost more to install because the technicians need to undergo special training to install properly. Furnaces located in difficult-to-access areas also cost more to install because it takes the technician longer.

How Much Does It Cost to Run an Oil Furnace

Oil is one of the priciest heating materials available. It produces more BTUs per gallon than gas or propane, so you use less of it than other materials, but your overall costs are still higher. The average price to heat a home with oil in the U.S. is around $1,400 each winter, although costs vary depending on location, home size, and how efficient the furnace is.

Red oil furnace installed

Oil Furnace Replacement Costs

The initial costs of installing a new oil furnace involve the set up with the tank and oil pipe and installing the vents and drains. Replacements are slightly less expensive because you do not have to purchase a new tank or install an oil line.

There is a lot of cleaning that happens when replacing an oil furnace, so you may find that your labor costs work out to be about the same. Expect replacement costs to be closer to $5,000, depending on the amount of work needed.

Signs that your oil furnace needs replacing include a lack of hot air when the blower is on, using a higher than average amount of oil, rust on the furnace, or noise coming from the furnace. Due to the high cost of oil, if your furnace is more than 10 years old, consider a more efficient replacement to lower your monthly heating costs.

High-efficiency Oil Furnace Prices

Oil furnaces are typically not very efficient. They use less fuel than other furnace types, but most do not achieve an efficiency greater than 90%. A few high-end brands have an efficiency of 95% by using a condenser. These are more expensive, having starting costs for the furnace itself at around $5,000. You pay more for the installation as well because a drain needs to be installed.

Converting an Oil Furnace to an Electric Heat Pump Cost

If you live in zones 1 or 2, you may not use your oil furnace enough to make it worth replacing it and dealing with the high cost of oil. In this case, you may want to convert to an electric heat pump instead. Electric heat pumps are not efficient at heating homes in colder climates but work well in warmer areas.

Heat pumps have a wide range of costs because they are made for single rooms or entire houses. The most common type is air-to-air, which uses the heat in the outside air to warm your home, even on cooler days. The cost to convert to a heat pump is around $2,000 - $8,000, depending on the size and style of the system.

Propane vs Oil Furnace

Oil is commonly used in areas where natural gas is unavailable. Many of those areas have access to propane, which is delivered and stored at the house like heating oil. Propane is less expensive to use than oil, costing around $1,100 each winter, and the cost to install a new furnace is also less costly, approximately $4,000 for a high-efficiency furnace.

Propane furnaces operate in much the same way as an oil furnace. They are cleaner and require less maintenance, however, because they do not produce the same amount of soot. Propane is difficult to get in some regions, in which case oil is often a better choice for heating your home.

Oil Furnace vs Gas Furnace

Another alternative to oil furnaces are gas furnaces. While oil is traditionally used in areas where gas lines do not run, there are times when you may have a choice between the two types. Gas furnaces cost about the same, approximately $6,000 for a high-efficiency unit. The real benefit of using a gas furnace is the lower cost of heating your home. Heating with gas costs around $540 a year, as opposed to the $1,400 a year that it costs to heat with oil.

Gas furnaces are generally cleaner and do not require as much maintenance. While the cost is lower, you use more gas to heat your home than oil because oil burns hotter and produces more BTUs. Arguably, this makes oil furnaces slightly better for the environment as they use less natural resources to run.

Oil Furnace Maintenance

Oil furnaces tend to be higher in maintenance than other types. They produce a lot of soot, which needs to be properly vented and cleaned from the furnace regularly. Change the filters periodically and have your ductwork cleaned because the soot builds up inside the ducts, lowering their efficiency over time. Expect to service your furnace yearly at a cost of around $200, change your filters every 1 - 3 months, and clean your ducts every 3 - 4 years to keep your system running optimally.

Mobile Home Oil Furnace Prices

Mobile homes are generally smaller than stick-built properties and use significantly less oil and a much smaller furnace to heat. Expect the average mobile home oil furnace to have starting costs of around $1,500. Keep in mind that not as many brands produce oil furnaces for this use, and you may find more options with natural gas, propane, or electric furnaces.

Enhancement and Improvement Costs

Variable-speed Blower

Having a variable-speed blower on your furnace increases its efficiency by adjusting to your needs. These furnaces start at about $5,000.

Removal or Disposal of Old Furnace

Many companies remove and dispose of your old furnace at no additional cost. Others charge a fee between $50 and $200 for this service, so ask if it is included.

Hepa Air Filter or Humidifier

Installing a new furnace is a great time to add a whole-house HEPA filter or humidifier to clean and condition the air in your home. These cost around $600 - $1,000, depending on the type.

Add Insulation to Your Home

Adding insulation to your home reduces the amount of fuel needed to run your furnace. This lowers the furnace size you need and your monthly energy bills. The average cost to insulate a home is between $3,500 and $4,500.

Additional Costs and Considerations

  • If you purchase a high-efficiency furnace, you may be eligible for a tax credit, depending on its efficiency and your home’s age. These amounts change each year, so check with your HVAC technician or accountant for more information.
  • Depending on where you live, you may need to have a permit and inspection for replacing or installing a furnace or working on your HVAC system. Speak to your HVAC technician for more information.
  • Have your technician perform any necessary maintenance before you replace a furnace. Sometimes, only inexpensive repairs are necessary to keep the unit running.
  • Replacing your furnace is also a good time to have your air ducts sealed to improve the furnace’s efficiency. This extends your furnace’s life and saves money on your energy bills each month.
  • Heating a home with oil and maintaining an oil furnace is more expensive than using other furnaces. It is roughly three times as costly to run an oil furnace over a gas furnace, so if gas is available in your area, you may want to switch.


  • How much does an oil furnace cost?

Oil furnaces have a wide range of costs. The average price is around $6,000.

  • Are oil furnaces efficient?

Most oil furnaces are around 90% efficient, but high-efficiency models are available that reach 95%.

  • How long does an oil furnace last?

Oil furnaces last 15 - 25 years, depending on the quality and brand.

  • When should you replace your oil furnace?

If it is more than 15 years old, upgrade to a more efficient unit. Otherwise, if it begins making noise, blows cold air, or uses significantly more oil, it is time to replace it.

  • How often should an oil furnace be cleaned?

Oil furnaces should be cleaned at least once a year and have the filters changed every 1 - 3 months.

Was this guide helpful to you?

Cost to install an oil furnace varies greatly by region (and even by zip code). To get free estimates from local contractors, please indicate yours.

Labor cost by city and zip code

Compared to national average
Anchorage, AK
Athens, GA
Aurora, CO
Aurora, IL
Baltimore, MD
Berkeley, CA
Boston, MA
Bristol, PA
Brockton, MA
Bronx, NY
Brooklyn, NY
Buffalo, NY
Canton, MI
Chicago, IL
Cincinnati, OH
Cleveland, OH
Columbus, OH
Concord, CA
Copake, NY
Dallas, TX
Daly City, CA
Davenport, IA
Denver, CO
Detroit, MI
El Paso, TX
Fontana, CA
Fort Lauderdale, FL
Fresno, CA
Glendale, CA
Goshen, VA
Greenland, NH
Greensboro, NC
Hartford, CT
Houston, TX
Imlay City, MI
Indianapolis, IN
Islip, NY
Jacksonville, FL
Jersey City, NJ
Kissimmee, FL
Las Vegas, NV
Laurel, MT
Littleton, CO
Los Angeles, CA
Loveland, OH
Lynn, MA
Miami, FL
Milwaukee, WI
Minneapolis, MN
New York, NY
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