Furnace Replacement Cost in 2026: By Fuel, Efficiency, and Size

A new furnace runs $3,800 to $12,000 installed in 2026. Where you land inside that range comes down to three decisions: the fuel type (gas, electric, oil, or propane), the efficiency rating (measured as AFUE), and the size your home actually needs. A basic electric or standard-efficiency gas unit sits near the floor; a high-efficiency modulating gas furnace in a larger home pushes toward the ceiling.

Here's the full breakdown — cost by fuel, cost by efficiency, cost by size — plus the install extras that quietly add up and a worked example so you can sanity-check any quote you're handed.

What a furnace replacement costs in 2026

The furnace itself is roughly half the bill; labor, venting, and code work make up the rest. Installation typically takes four to eight hours for a like-for-like swap.

| Tier | Installed cost | What it usually buys | |---|---|---| | Low | $3,800 | Small home, standard-efficiency gas or electric unit | | National average | $5,500–$7,500 | Mid-size home, 90%+ AFUE gas furnace | | High | $12,000 | Large home, high-efficiency modulating furnace, new venting |

Labor generally runs $1,000–$3,000 of the total, at $75–$150 an hour for a licensed HVAC tech.

Cost by fuel type

Fuel type is the biggest single price driver. Gas is the most common and usually the cheapest to run; electric costs less to install but more to operate in cold climates.

| Fuel type | Typical installed cost | Notes | |---|---|---| | Electric | $1,800–$6,000 | Cheapest to install, priciest to run in cold climates | | Natural gas | $3,800–$10,000 | Most common; low operating cost | | Propane | $3,900–$9,500 | Similar to gas, higher fuel cost | | Oil | $6,000–$12,000 | Highest install and fuel cost; older homes |

Cost by efficiency (AFUE)

AFUE — Annual Fuel Utilization Efficiency — tells you how much fuel becomes heat. An 80% AFUE furnace wastes 20 cents of every fuel dollar; a 98% unit wastes almost nothing.

| Efficiency tier | AFUE | Price impact | |---|---|---| | Standard | 80–83% | Baseline | | Mid / high-efficiency | 90–95% | +$1,000–$2,500 | | Premium (condensing/modulating) | 96–98%+ | +$2,500–$5,000 |

High-efficiency condensing furnaces vent differently (through PVC, not a metal flue), so switching up a tier can add venting costs — budget for it.

Cost by size (BTU)

Furnaces are rated in BTUs of heat output. Too small and it never keeps up; too big and it short-cycles and wears out early. A proper installer runs a load calculation rather than matching the old nameplate.

| Home size | Typical furnace size | Installed cost | |---|---|---| | Up to 1,200 sq ft | 40,000–60,000 BTU | $3,800–$6,000 | | 1,200–2,000 sq ft | 60,000–80,000 BTU | $4,500–$8,000 | | 2,000–2,800 sq ft | 80,000–100,000 BTU | $6,000–$10,000 | | 2,800+ sq ft | 100,000+ BTU | $7,500–$12,000 |

What drives the price

• Efficiency upgrade. Jumping from an 80% to a 96% AFUE unit raises equipment cost and may require new PVC venting.
• Venting and flue work. Condensing furnaces need different venting; older chimneys may need a liner.
• Ductwork. Leaky or undersized ducts add $1,000–$5,000 if they need sealing or replacement.
• Gas line or electrical. A fuel conversion or a larger electric furnace can require new gas piping or a panel upgrade.
• Permits and inspection — usually $100–$500.
• Removal and disposal of the old unit.
• Accessibility. Attic and crawlspace installs cost more in labor than an open basement.

Cost by region

Location shifts furnace pricing through labor rates, fuel availability, and how hard your climate works the system. Cold-climate markets tend to run higher — both because heating demand is greater and because installers stay busy.

| Region | Relative pricing | |---|---| | Northeast & Upper Midwest | 10–20% above national average | | West Coast metros | 10–25% above average | | South & rural areas | At or below average |

Natural gas isn't available everywhere, either — in areas without a gas line, propane or electric becomes the default, which changes both install and operating cost.

Additional costs to budget for

• Thermostat upgrade — a smart thermostat adds $150–$500.
• Chimney liner — an older masonry chimney serving a new furnace may need a liner, $500–$2,000.
• Humidifier or air cleaner tied into the system, a few hundred dollars each.
• Condensate pump and drainage for high-efficiency condensing units.
• Gas or electrical work if you're changing fuel type or capacity.

Signs you need a new furnace

• The unit is 15–20+ years old (typical lifespan).
• Heating bills keep rising despite maintenance.
• Frequent repairs, or one repair costing more than a third of a new furnace.
• Uneven heating, constant cycling, or a persistently yellow (not blue) burner flame.
• A cracked heat exchanger — a carbon-monoxide risk that means replace, not repair.

If your furnace just quit and you're not sure it's dead, run through our no-heat troubleshooting guide before you pay for an emergency call.

If you ever smell gas or suspect carbon monoxide, leave the house and call your gas utility or 911 before doing anything else.

How to save money

• Get three itemized quotes. The same furnace job can vary 20–40% in price between contractors.
• Replace in the off-season — late spring through early fall — for better pricing.
• Claim rebates and tax credits. High-efficiency gas furnaces and electric heat pumps often qualify for federal or utility incentives worth hundreds.
• Match efficiency to your climate. In a mild climate, a 96% AFUE furnace may never pay back its premium; in a cold one, it will.
• Bundle with the AC if both are aging — see the full HVAC replacement guide.
• Don't oversize. Insist on a load calculation.

Worked example: A 1,800 sq ft home replaces a 20-year-old gas furnace. The homeowner picks a 70,000 BTU, 96% AFUE condensing unit. Equipment and install run about $5,600, new PVC venting adds $900, and a $200 permit brings the total to roughly $6,700 — squarely in the national average.

FAQ

Gas or electric furnace — which is cheaper? Electric costs less to install but more to run in cold climates. Gas costs more upfront but is usually cheaper to operate where natural gas is available.

How long does a furnace last? 15–20 years with regular maintenance; 10–15 without. An annual tune-up is the cheapest way to stretch it.

Is a high-efficiency furnace worth it? In colder climates, yes — the fuel savings add up. In mild climates, the payback can outlast the unit, so run the numbers.

Should I replace the AC at the same time? If both are old, replacing them together keeps efficiency ratings matched and is cheaper per unit than two separate jobs.

Do I need a permit? Yes, in almost all jurisdictions. A licensed installer pulls it; skipping it can void the warranty.

A furnace is a 15-to-20-year purchase, so weigh efficiency against your climate, get three itemized bids, and make sure the unit is sized to your home — not just matched to the old one.

Cost figures are 2026 national averages for general information only, not quotes. Your price depends on your specific job, home, and location. Always get a written estimate before authorizing work.