DATA-BACKED GUIDE · UPDATED JULY 2026
How Much Does a New Furnace Cost, Installed?
A furnace is a big-ticket, once-a-decade purchase, and like the rest of HVAC it has no list price. The install runs into four or five figures depending on fuel type, efficiency, and how much the contractor marks up labor. Gas, electric, and oil models all price differently, and the same furnace can cost noticeably more from a national chain than from a local shop. Here is what drives it.
The quick version
- Furnace efficiency is rated by AFUE, and a high-efficiency condensing model costs more up front but burns less fuel.
- Fuel type matters, since gas, electric, and oil furnaces have different equipment and venting costs.
- A high-efficiency furnace often needs new venting, which adds labor that many quote sheets bury in the total.
- There is no published price, so several itemized quotes are the only real benchmark.
- Rebates and tax credits exist for efficient models, but the amounts and rules change, so verify what is current.
What people actually paid
Why the price varies so much
The main drivers are fuel type, efficiency, and the venting your home already has. A basic gas furnace is one price, a high-efficiency condensing model another, and switching fuel types can mean new gas lines or electrical work. Homes with tired ducts sometimes need ductwork done at the same time, which the contractor may fold into the total. Many people replacing a furnace also weigh a heat pump install, since a heat pump can heat and cool and often qualifies for larger rebates, or pair the job with a central AC install to share the labor. Brand, region, permit fees, and the contractor's markup do the rest.
How to pay less
- Get three or more itemized quotes with the exact furnace model and AFUE rating on each.
- Ask whether a high-efficiency condensing furnace needs new venting, since that hidden labor changes the comparison.
- Right-size the furnace with a Manual J load calc rather than just matching the old unit's BTU rating.
- Check utility rebates and the current federal efficiency credit before you lock in an efficiency tier.
- Do not buy on a same-day 'today only' discount, because a five-figure decision deserves a night's sleep.
- If you are also replacing cooling, bundling a central AC install with the furnace saves one trip of labor.
Common questions
Gas or electric furnace, which is cheaper?
It depends on local energy prices. An electric furnace usually costs less to install but more to run where electricity is pricey, while a gas furnace costs more to install and often less to run. Look at your utility rates, not just the equipment sticker, before deciding.
What AFUE rating should I get?
AFUE is the percentage of fuel the furnace turns into heat, so a 96 percent model wastes far less than an old 80 percent one. In a cold climate with a long heating season, the higher rating pays back faster through lower gas bills. In a mild climate the premium is harder to recover before you move.
Why does a high-efficiency furnace cost more to install?
Condensing furnaces vent differently, usually through PVC pipe rather than a metal flue, and they produce condensate that needs a drain. That extra venting and drain work is real labor, which is why the install premium is bigger than the equipment price gap alone suggests.
Should I consider a heat pump instead of a furnace?
It is worth pricing. A heat pump install both heats and cools, runs on electricity, and often qualifies for bigger utility and federal incentives. In a mild climate it can replace the furnace entirely, and in a cold one, people pair it with a backup furnace. Get quotes for both and compare running costs, not just the sticker.
Do I need a permit to replace a furnace?
Yes, in nearly all areas, and gas furnaces in particular need an inspection for combustion safety and proper venting. A bad install can leak carbon monoxide, so the permit and inspection exist for good reason. Do not let a contractor talk you out of one.