Furnace Replacement Cost: What a New Furnace Costs Installed

Furnace replacement pricing confuses people because the equipment is frequently a minority of the bill. Two quotes on the same house can differ substantially and both be honest — they're describing different amounts of work.

Understanding what's in scope is what makes quotes comparable.

What moves a furnace replacement quote

The jump from 80% to 90%+ AFUE is the one that cascades. A condensing furnace exhausts cool, wet flue gas, so it cannot share the old chimney — that means new PVC venting, a condensate drain, and often re-venting whatever else was on that chimney.

What sets the price of a new furnace?

Capacity (BTU/h). Should come from a proper load calculation, not from matching the old unit. Higher capacity costs more, but the bigger issue is that most existing furnaces are oversized, so a correctly sized replacement may be smaller than what's there.

Efficiency tier. Non-condensing (around 80% AFUE) versus condensing (roughly 90%+). The equipment price difference is one thing; the installation implications are another, covered below. See AFUE and furnace efficiency explained.

Staging and blower. Single-stage, two-stage or modulating burner; PSC or variable-speed ECM blower. Both add cost, both improve comfort, and the ECM blower reduces electricity use meaningfully over a season.

Venting. The item that most often separates a cheap quote from a complete one — see below.

Ductwork condition. Leaking, undersized or poorly configured ducts. Replacing a furnace without addressing bad ducts means paying for capacity that never reaches the rooms. See ductwork problems and cost.

Electrical. A new furnace may need a dedicated circuit, a disconnect, or updated wiring depending on what's there. Check the requirement against your panel capacity with the home electrical load calculator.

Gas piping. Sizing may need to change if capacity changes, or if other appliances have been added since the original install.

Access. A furnace in an open basement is cheap to work in. One in a tight attic, a crawl space, or a closet requiring the unit to be dismantled to get it out costs more in labour.

Removal and disposal of the old unit.

Permit and inspection. Required in most jurisdictions for gas appliance replacement. A quote without a permit line is worth asking about — see permits for home electrification for the general principle.

Why does a high-efficiency furnace need new venting?

This is where quotes diverge most, and where a low bid often hides real cost.

Non-condensing (about 80% AFUE): exhaust is hot, so it can rise up a metal or lined masonry flue. If the existing chimney is sound and correctly sized, the venting cost is small.

Condensing (90%+ AFUE): exhaust is cool and mildly acidic. It gets pushed out through plastic pipe, typically through a sidewall, and the unit needs a condensate drain. That means:

• New wall penetrations and pipe routing, with required clearances from windows, doors, intakes and property lines
• A combustion air intake, usually also piped from outside
• A condensate drain route to an appropriate discharge, sometimes with a condensate pump if there's no gravity path
• Possible neutralisation of the condensate depending on local requirements

And the orphaned chimney problem. If your old furnace shared a chimney with a gas water heater, removing the furnace from that flue leaves the water heater alone in a chimney sized for two appliances. That can cause weak draft and condensation in the chimney, and it often requires relining or a different venting arrangement for the water heater. This is a genuine cost that gets omitted from quotes. Ask about it explicitly. See orphaned water heater venting.

How do I compare furnace quotes?

Ask every bidder for the same things:

1. A load calculation (Manual J), with the result — not "same as existing"
2. Model number, capacity and AFUE
3. Staging and blower motor type
4. Venting plan — route, penetrations, and what happens to the existing chimney
5. What happens to any other appliance sharing that chimney
6. Condensate drain route, and pump if needed
7. Duct work included — sealing, modification, new returns
8. Electrical work included
9. Gas piping changes
10. Permit and inspection included
11. Removal and disposal
12. Warranty — equipment and labour, separately, with terms
13. Commissioning — will they measure and document airflow, temperature rise and combustion?

That last one is underrated. A furnace installed without verifying airflow and temperature rise against the manufacturer's specification can run outside design conditions from day one, which shortens its life. See how long does a furnace last.

Can a furnace be too big?

The default in the trade is to match the old unit's capacity. That's usually wrong for two reasons:

• The old unit was probably oversized to begin with. Rule-of-thumb sizing has historically erred large.
• Your house may have changed. If you've air sealed, insulated, or replaced windows, the load is lower than it was.

An oversized furnace short-cycles: it heats the space quickly, shuts off, and restarts. That produces temperature swings, poor comfort, more wear per operating hour, and no efficiency benefit. See oversized HVAC problems.

Do envelope work before sizing. Air sealing and attic insulation are cheaper than the capacity they let you avoid buying — see how to air seal a house and attic insulation R-value guide.

Price the alternative while you're at it

A furnace replacement is a 15-to-20-year commitment, and the labour and access cost is being incurred regardless. That makes it the cheapest moment to consider something else.

A heat pump uses the same ductwork and provides cooling as well as heating. Whether it costs less to run depends on your local gas price against your electricity rate — worked through in heating cost by fuel type. Cold-climate models maintain output well below freezing; see cold climate heat pumps.

Dual fuel — heat pump for most of the season, furnace for the coldest stretch, with an automatic changeover. Often the practical answer when you're replacing a furnace and already have gas service. See dual fuel heat pump systems.

Price both with the heat pump cost calculator and check the economics with the heat pump payback calculator.

If any rebates or incentive programs apply to your equipment choice, verify current eligibility with the administering utility or agency yourself — programs and amounts change, and a figure quoted by a salesperson isn't a commitment.

Emergency replacements

The worst time to buy a furnace is the morning it dies in a cold snap. You get one quote, no time to compare, and no leverage.

If your furnace is past 15 years or showing warning signs, get quotes in spring or autumn while you have time. Contractors are less busy, you can compare properly, and you can do envelope work first so the new unit is sized to an improved house.

If you're already in the emergency: consider a repair that gets you through the season, then plan the replacement properly. A cheap stop-gap that buys you three months of decision time is often the better financial move.

The bottom line

Equipment is often the smaller part of a furnace quote. Venting changes — especially moving to a condensing unit or orphaning a shared chimney — plus ductwork, electrical and access are what move the number. Insist on a real load calculation rather than matching the old size, get every bidder quoting the same defined scope, and ask specifically what happens to any appliance sharing the flue. And since the labour is being spent anyway, price a heat pump or dual-fuel setup alongside.

Compare options with the heat pump cost calculator.

Where to go next

• Furnace not heating