A furnace is fundamental to the long-term health of your home. Learn more about the expenses associated with this important feature.
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Installing a new furnace is probably not the most exciting work you will ever do on your home, but it's a project most homeowners find themselves dealing with sooner or later. And when the time comes, it's best to understand what features to look for in a new furnace as well as have an idea of what the purchase might cost you.

Here's a breakdown of costs, features, and other important considerations when searching for a new furnace.

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Credit: Adam Albright

Price Range Based on Style of Furnace

There are various factors that contribute to the cost of a new furnace. They include the type of furnace you select, the size of your house, and the cost of labor for installation, explains Bailey Carson, home care expert for Angi

"Furnace systems can cost anywhere from $2,300 to $7,200, depending on the size of your home and specific furnace type," says Carson. 

Larger homes usually need more expensive furnaces because the heat needs to fill a larger space, says Carson. Furnace types, meanwhile, include gas, electric, oil, mini-split, and geothermal. According to research conducted by Angi, the price range based on furnace type spans from a low of about $2,000 to as much $17,000. 

  • Gas: $3,800 - $10,000
  • Electric: $2,000 - $7,000
  • Oil: $6,750 - $10,000
  • Mini-Split: $2,000 - $15,000
  • Geothermal: $4,000 - $17,000

Additional Factors That Impact Furnace Price

Just like buying a new car, there are different brands, models, warranties, and features for furnaces that can impact the end price as well, says James Strilcic, owner of JPS Furnace & Air Conditioning.

Single-Stage Furnaces

At the low end of the price spectrum are what's known as single-stage furnaces. "Single-stage means the furnace is 'all on' or 'all off' until your home reaches the desired temperature," says Strilcic. "Using a car analogy, this would be similar to putting the pedal all the way down in the car until you reach the desired speed, and then letting off the pedal completely. Your furnace gets your home to its desired temperature, but it can be louder and less efficient than other models. This can also lead to cold spots in your home as the heating constantly turns off and on."

Two-Stage Furnaces

The next step up in quality and price point is a two-stage furnace. "The name explains it all, the furnace has two heating stages, one for colder temperatures and one for milder temperatures," says Strilcic. "This helps provide a bit more heating distribution, which reduces cold spots in the home and also provides more efficiency."

Two-stage furnaces are a common choice for homeowners seeking to balance a budget and overall efficiency.

Modulating Furnaces

A modulating or variable-speed furnace is the top-of-the-line choice in both quality and price point. These furnaces offer the highest level of efficiency for several reasons and are considered premium furnaces. 

"The reason this furnace is more efficient is that it has a variable-speed motor, which means the furnace can operate at a variety of speeds to cover a wide range of temperatures," explains Strilcic. "The furnace can also modulate the fuel, meaning it can restrict the amount of gas needed to keep the home at the right temperature. This would be the equivalent of using cruise control on your car."

Because modulating or variable-speed furnaces can operate for longer periods of time at lower speeds, they're able to create the most comfort at home, reducing hot or cold spots while functioning more quietly.

Additional features that can be included in furnaces (for an added cost) include humidifiers, filtration systems, and air purifiers.

"Every home and individual have different needs and preferences so add-on features can be extremely important to some while not important to others," says Strilcic. "The key takeaway is to find a trustworthy local company that can help guide you to find a model that is the right fit for your home, and family."

Cost of Furnace Installation

In addition to the costs associated with simply purchasing a furnace unit, most homeowners will also need to hire professionals to handle the installation of a new furnace. Expect to spend between $150 to $500 per hour, depending on your location, the complexity of the furnace system selected, and the contractor fees, says Carson.

"When all is said and done, most people spend between $500 and $2,000 on labor costs when installing a new furnace," says Carson.

Furnace Warranty Costs

When spending a significant sum of money on equipment for your home, it can often make sense to invest in a warranty. Some experts describe warranties as a must-have for furnaces—meaning, you'll want to factor this cost into your new furnace budget as well.

"Warranties are very important when buying a furnace because a warranty is typically a direct reflection of the life expectancy of a unit," explains Strilcic. "This isn't always the case, as the quality of the installation is equally as important. But if you have a long warranty period, you can have more peace of mind that you won't be forking out extra dollars on repairs in the near future."

Warranties range from as short as four to six years to as long as 12 years, says Strilcic.

There are also two types of warranties. The first is a parts and labor warranty, which sometimes comes directly from the furnace manufacturer. "This warranty means if something goes wrong, you would ideally be covered," says Strilcic. 

However, some furnace brands only offer 'parts' warranties, meaning that if something were to break inside the furnace, you would still be responsible for paying the cost of labor to have the unit fixed or replaced. Depending on the work required, these costs can quickly exceed $300, says Strilcic. 

"It's always best to check with your local company to see what's covered under your warranty," Strilcic explains. 

When to Replace Your Furnace 

Most homeowners do not replace a furnace until they absolutely must, says Curtis Howse, CEO of home and auto for Synchrony

"In our work with [furnace] dealers, we've seen the majority of consumers will replace their furnace in an emergency so they can get heat," says Howse. "This typically occurs when the furnace is broken or after routine maintenance when the experts review the life of the unit."

To avoid such a scenario, consider having your furnace inspected periodically by an experienced technician.

"The typical life expectancy of heating equipment is 15 to 20 years," says Mark Dawson, chief operating officer for One Hour Heating & Air Conditioning. "If your heating system has surpassed its lifespan or is displaying any inconsistencies in noise, smell, and sound, it may be time to consider replacing it."

Paying for a New Furnace

It's not unusual to need help financing home renovations or unexpected equipment purchases. A 2021 study conducted by Synchrony found that 41% of consumers would abandon a home improvement purchase if financing were not an option available to them. 

The good news is that there are plenty of financing options out there that can help with such expensive purchases. Be sure to do your research and find a financing plan that offers the most competitive interest rates and repayment timeline.

"Financing can be a much-needed solution for buying furnaces, as it gives consumers the ability to buy the type of unit needed for their household in the moment they need it, such as a more sophisticated unit or higher efficiency model, which has the added benefit of delivering savings over time," says Howse.

Final Considerations for Purchasing a New Furnace

Bear in mind that every home is unique and has its own set of needs. Because of this, experts recommend collaborating with a licensed professional before selecting your new furnace. 

"You should make sure that you're purchasing a furnace that works for the size of your home and your budget, both short-term and long-term," says Carson.

It's also worth noting that given how critical a role a furnace plays in the operation and safety of your home, it is not the type of project you'll want to cut costs on if you can avoid it. A furnace is fundamental to the long-term health of your home. Without proper heat, in addition to being a health hazard, it could lead to issues like frozen and burst pipes.

"While it may be tempting to opt for a cheaper option, you want something that will work properly and last a long time. Make sure to choose the best long-term furnace option for your home," says Dawson.

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