older home has furnace system repaired for the winter

Installing a new furnace is expensive. The average cost ranges from $2,500 to $6,500, not counting labor fees, ductwork, removal, and disposal. This guide breaks down what each aspect of furnace installation costs and provides a tool to connect with HVAC technicians in your area.



Furnace Installation Cost

The average furnace costs $2,500 to $6,500 for the unit, plus $150 to $500 per hour for installation. These figures are for the cost of a new furnace, not repairs to upgrade an old furnace. 

British Thermal Units (BTUs) measure a furnace’s heat output. This refers to the amount of energy needed to raise the heat of one pound of water by one degree Fahrenheit. Most homeowners need 30 to 50 BTUs per square foot of their home. For example, an 80,000 BTU furnace can heat a 2,000-square-foot home.

While size affects how much you pay for furnace installation, the total cost largely depends on the type of furnace you order.

Electric Furnace Installation Cost

An electric furnace costs $800 to $1,100 for the unit or $2,000 to $4,000 with installation. 

Because electric furnaces use electricity to heat your home, they’re often considered the most efficient. Your electric bills will be higher, but installation is cheaper. This type of furnace is also one of the easiest to maintain.

Natural Gas Furnace Installation Cost

Natural gas furnaces cost $700 to $3,000, or $3,000 to $8,000 with installation. Replacing an electric furnace with a gas furnace costs an additional $200 to $500 because you’ll need to install a gas line. 

Gas furnaces are one of the most common furnace types. They use methanol gas from your local municipal line to ignite a gas burner. This hot combustion raises the temperature of the air. Natural gas furnaces have low annual costs and are considered more eco-friendly than other gas furnaces, such as oil or propane. However, a gas line must be near your home to install one of these furnaces. 

Oil Furnace Installation Cost

Oil furnaces (also called pressure burners) cost an average of $600 to $2,500, or $3,000 to $5,000 with installation. These furnaces spray oil into a combustion chamber at high pressure, which then ignites by an electric spark. The oil continuously burns as the oil mist is sprayed. Oil furnaces produce maximum heat, as oil burns hotter than gas. However, energy bills from oil furnaces are higher than for gas options.

Propane Furnace Installation Cost

Propane furnaces cost $800 to $2,000, or $2,000 to $5,000 with installation. These furnaces are a great option for homeowners who don’t have access to natural gas, though they require propane tank installation. Once the propane is released, the furnace converts it to gas. The gas ignites, heats up, and forces hot air through your ductwork.  

Heating costs for propane furnaces vary greatly depending on the furnace’s efficiency. The cost of propane gas also varies based on your home’s location.



Other Furnace Installation Cost Factors

In addition to the cost of the furnace and labor, here are some other factors to consider when purchasing the best furnace for your home.


As with other home appliances, furnace prices vary by brand. Recognizable brands such as Lennox and American Standard charge more for their products. However, these brands are often higher in quality and can heat larger spaces. High-efficiency models are also more expensive initially but save money in fuel costs. We recommend discussing the best brand for your home with an HVAC professional, as you may need a specific brand that matches the rest of your HVAC system. 


Annual Fuel Utilization Efficiency (AFUE) measures how efficiently a furnace converts fuel to heat. A higher AFUE rating means the furnace uses more of the heat it generates. For example, furnaces with a 90% AFUE rating lose only 10% of their energy and use the rest to heat your home.

Furnaces with higher AFUE ratings typically cost more, as they have more complex parts than mid-efficiency furnaces. Upgrading to a mid-efficiency furnace can still lower your energy bills if you have an old, inefficient furnace.

Furnaces with an AFUE rating between 90% and 95% offer an ideal balance between energy efficiency and price. Repair costs are also lower for these furnaces than those with 95% or more AFUE ratings.

Ongoing Costs

Furnaces have a few ongoing costs outside of the up-front purchase. For example, you’ll need to pay for annual maintenance and new air filters every one to three months. Changing or cleaning the air filter and scheduling regular maintenance will save you money long-term, as these steps prevent problems and ensure your furnace is working optimally. The average cost of a furnace tune-up is $100 to $125, and air filters only cost $5 to $30 each. 


An HVAC technician will consider your home’s landscaping, construction, and total square footage to determine what furnace size you need. A too-small furnace won’t adequately heat your home, while one that’s too large can cause issues such as short cycling. 

Here’s a breakdown of average home sizes and the BTUs a furnace must produce to heat them effectively.

Square FootageFurnace BTUs


Many furnaces include a warranty from the manufacturer. A furnace installation company may also include a labor warranty. Manufacturer warranties often last for ten years, and many manufacturers require you to register the furnace to claim its warranty. You’ll need to follow the maintenance guidelines to keep the warranty valid, which may require additional costs. Make sure to get any warranty in writing.



Common Furnace Repairs

Furnaces have an average life span of 15 to 20 years. If your furnace isn’t working correctly, you might be able to pay for one of the following repairs below rather than a new furnace installation.

  • Annual cleaning: $60–$80
  • Broken blower belt: $30–$110
  • Broken thermostat: $100–$500
  • Cracked heat exchanger: $2,000–$3,500
  • Damaged blower bearings: $30–$150
  • Filter change: $40–$150



Contact an HVAC Professional

Furnace installation is not a do-it-yourself (DIY) job. Home heating systems have complex, expensive components that are best left to professionals. An HVAC expert can handle your furnace installation or recommend a specific repair. They typically provide warranties that help protect this sizable investment. 

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Frequently Asked Questions About Furnace Installation Cost



When to Consider a Broader Home Inspection

When purchasing or selling a home, it is critical to complete a thorough inspection to understand the condition of the property. A standard home inspection includes an assessment of a home’s systems and physical structure. After the process, the inspector will provide a report detailing their findings and recommendations.

If you are thinking about buying a home or putting your home on the market, we strongly recommend finding an ASHI home inspector in your area.