How Much Does a New Furnace Cost to Install? (2025 Prices)

TL;DR: A new furnace installed typically runs $3,800 to $10,000, with most homeowners landing around $5,500 for a standard 80% AFUE gas furnace. High-efficiency models (95%+ AFUE), larger square footage, and ductwork repairs push costs toward the top of that range, while electric furnaces cost less upfront but more to run long-term.

_Last reviewed: July 2026 · 7 min read_

Your furnace is 17 years old, it's making a rattling noise, and you're bracing for a quote that could go either way. The honest number: most gas furnace installations land between $3,800 and $7,500, with high-efficiency or oversized systems climbing past $10,000.

Okoniq Property Hub logs your furnace's install date, warranty terms, and service history so you're not guessing when the next repair bill lands.

What's the average cost to install a new furnace?

Nationally, a new furnace installed costs $3,800 to $10,000, with $5,500 as a common midpoint for a standard efficiency gas unit in a 2,000 square foot home. That figure includes the equipment, labor, and basic hookup, but not major ductwork changes or electrical upgrades.

Breaking it down: the furnace unit itself typically costs $1,500 to $4,000 depending on efficiency and BTU output. Labor adds another $1,500 to $3,000, since a full-day install requires disconnecting the old unit, running new venting or gas lines, and testing the system. Permit fees, which many owner-operators forget to budget for, run $50 to $300 depending on your municipality.

If your ductwork is original to a house built before 1990, expect an inspector to flag leaks or undersized returns, which can add $500 to $2,000 to the job.

What factors affect furnace installation cost?

Five things move the price most: efficiency rating, fuel type, house size, ductwork condition, and labor rates in your region. A 95% AFUE furnace costs $1,000 to $2,500 more upfront than an 80% AFUE unit, but it can cut your annual heating bill by 15% to 20%.

House size matters directly through BTU requirements. A 1,500 square foot home might need a 60,000 BTU furnace costing around $3,000 installed, while a 3,000 square foot home could need 100,000 BTUs and push the total past $6,000. Regional labor rates also swing costs 20% to 40% between rural and metro markets.

If your home still has original knob-and-tube or aluminum wiring, an electrician may need to upgrade the circuit before the furnace install, which is worth checking alongside aluminum wiring safety fixes if your house predates 1975.

Gas vs electric vs oil furnace: which costs more?

Gas furnaces cost less to run but more to install if you don't already have a gas line; electric furnaces cost less upfront but 2-3 times more in monthly operating costs. Oil furnaces sit in between on installation but require annual tank maintenance and fuel delivery contracts.

| Fuel Type | Install Cost | Monthly Operating Cost | Typical Lifespan | |---|---|---|---| | Natural Gas | $3,800-$7,500 | $60-$150 (winter) | 15-20 years | | Electric | $1,500-$3,500 | $150-$300 (winter) | 20-30 years | | Oil | $4,000-$8,500 | $100-$250 (winter) | 15-20 years |

For owner-operators renting out multiple units, gas furnaces generally offer the best long-term value if the property already has a gas hookup. Adding a new gas line from the street can add $1,000 to $5,000 depending on distance, which sometimes tips the math back toward electric.

How can you lower your furnace installation cost?

Get three quotes, ask about rebates, and fix insulation gaps before upsizing your furnace. Utility companies in many states offer $200 to $1,500 in rebates for high-efficiency furnace installs, and the federal government's 25C tax credit covers up to $600 for qualifying units through 2032.

Before you spend on a bigger furnace, check your attic insulation. A poorly insulated attic forces your furnace to work harder and run longer, which is why an attic insulation upgrade often pays for itself within 3 to 5 years and can let you install a smaller, cheaper furnace than you'd otherwise need.

Timing also matters. Contractors are often busiest in October and November, right before cold weather hits, and prices can run 10% to 15% higher during peak season. Scheduling replacement in late spring or summer, before you actually need heat, often gets you a better price and faster installation.

How long does a furnace last, and when should you replace vs repair?

Most furnaces last 15 to 20 years, and the rule of thumb is to replace rather than repair once the unit passes age 15 or a single repair costs more than 30% of a new unit's price. A furnace that's needed two or more repairs in the past two years is usually cheaper to replace than to keep patching.

Annual maintenance extends lifespan significantly. Furnaces that get a yearly tune-up, filter changes every 60 to 90 days, and a clean heat exchanger tend to run reliably for the full 20 years, while neglected units often fail by year 12. If you're weighing a full replacement against ongoing repairs, the same logic applies to boilers, covered in boiler maintenance basics, and to older baseboard systems in baseboard heater maintenance.

FAQ

How much does it cost to replace a furnace and AC together?

A combined furnace and AC replacement typically costs $7,000 to $15,000 installed, since contractors can share labor for ductwork and electrical work, saving roughly 10% to 15% compared to replacing each system separately.

Does furnace size affect installation cost significantly?

Yes, a furnace that's one size larger (in the 20,000-40,000 BTU increments manufacturers use) can add $500 to $1,500 to both the equipment and labor cost, which is why an accurate load calculation from your contractor matters more than guessing based on square footage alone.

Is it cheaper to repair an old furnace than replace it?

A repair under $500 on a furnace younger than 10 years is usually the cheaper move, but once repair costs exceed $1,000 on a unit older than 15 years, replacement typically pays off within 2 to 3 years through lower energy bills.

How long does furnace installation take?

Most standard furnace installations take 4 to 8 hours for a straightforward swap, but jobs requiring ductwork repairs, new gas lines, or electrical panel upgrades can stretch to 2 full days.

Do I need a permit to install a new furnace?

Most US municipalities require a permit for furnace replacement, typically costing $50 to $300, and skipping it can create problems later when selling the home or filing an insurance claim after a related issue like a chimney or venting problem.

This is educational information, not financial or contractor advice. Get written quotes from at least three licensed HVAC contractors and confirm permit requirements with your local building department before signing a contract.