When the temperatures drop, your furnace is one of the most important systems in your home. But like any appliance, it doesn’t last forever. If you’re noticing higher energy bills, frequent repairs, or uneven heating, it may be time to think about furnace replacement. One of the first questions homeowners ask is: How much does a new furnace cost? Let’s break down the factors that influence furnace replacement costs so you can plan your budget with confidence.

Average Cost of a New Furnace

On average, a new furnace costs between $3,000 and $7,500, including installation. The final price depends on several factors such as the type of furnace, energy efficiency, and labor costs in your area.

Here’s a quick breakdown:

• Gas Furnace: $3,800 – $6,500

• Electric Furnace: $2,500 – $5,500

• Oil Furnace: $4,000 – $7,500

• High-Efficiency Furnace: $5,000 – $10,000

Factors That Impact Furnace Replacement Cost

1. Type of Furnace

Gas furnaces are the most common because they’re efficient and cost-effective to run. Electric furnaces are usually cheaper upfront but can lead to higher utility bills depending on electricity rates. Oil furnaces are less common but remain an option for older homes without natural gas lines.

2. Furnace Size & Capacity

The size of your furnace must match your home’s square footage. A system that’s too small won’t heat your home properly, while an oversized furnace can waste energy. A professional HVAC contractor will calculate the correct size using a Manual J load calculation.

3. Energy Efficiency (AFUE Rating)

AFUE (Annual Fuel Utilization Efficiency) measures how well your furnace converts fuel into heat. Standard furnaces have an AFUE rating of 80–89%, while high-efficiency models can reach 90–98%. Higher efficiency means lower energy bills, but it also comes with a higher upfront cost.

4. Installation & Labor

Labor typically makes up 30–50% of the total furnace replacement cost. This can vary depending on your location, the complexity of the installation, and whether ductwork modifications are needed.

5. Additional Upgrades

Some homeowners choose to add features like smart thermostats, upgraded filtration systems, or new ductwork during furnace replacement. These add-ons will increase the overall cost but can improve comfort and air quality.

Signs You Need a Furnace Replacement

Not sure if it’s time to replace your furnace? Here are a few common warning signs:

• Your furnace is 15–20 years old or older.

• Frequent repairs are adding up.

• Energy bills are rising despite regular maintenance.

• Uneven heating throughout your home.

• Strange noises or unpleasant odors coming from the furnace.

Furnace Replacement vs. Repair: Which is Better?

If your furnace only needs a small repair and is under 10 years old, fixing it might be the better option. However, if your furnace is aging, inefficient, or requiring frequent service calls, replacement is often the smarter long-term investment.

Ways to Save on a New Furnace

Replacing a furnace can feel like a big expense, but there are ways to reduce the cost:

• Rebates & Incentives: Many utility companies and government programs offer rebates for energy-efficient furnaces.

• Seasonal Discounts: Scheduling installation during the off-season (spring or fall) can sometimes lead to lower labor costs.

• Financing Options: Many HVAC companies offer payment plans to make the expense more manageable.

The cost of furnace replacement varies widely, but planning ahead can help you budget more effectively. Whether you choose a standard gas furnace or a high-efficiency model, investing in a new system ensures your home stays warm and your energy bills stay manageable.

If you’re considering a furnace replacement, consult with a licensed HVAC professional who can recommend the right system for your home and provide an accurate estimate.

Matt Witte strives to be the best realtor in North Andover MA.

Any questions about real estate, reach out to Matt Witte, North Andover Realtor MA