Furnace Replacement Cost Calculator

Most US homeowners pay between $4,200 and $10,000 installed for a gas furnace replacement in 2025–2026, according to published cost guides. As a concrete anchor: our estimator prices a 96% AFUE gas furnace for a 2,000 sq ft Midwest home (mid-range brand, no ductwork changes) at $7,315 installed, with a realistic quote range of $6,200 to $8,800. The same home with an 80% AFUE unit comes in around $5,035. Electric furnaces are cheapest upfront (about $3,409 for a 1,500 sq ft Southern home, value tier) while oil furnaces run highest (about $10,087 for a 2,200 sq ft Northeastern home, premium tier). These are planning estimates, not contractor bids — always get 2–3 written quotes.

AFUE (Annual Fuel Utilization Efficiency) is the percentage of fuel a furnace converts into usable heat over a full heating season. An 80% AFUE furnace turns 80 cents of every fuel dollar into heat and vents 20 cents up the flue; a 96% AFUE furnace wastes only 4 cents. The three common tiers are 80% (single-stage, lowest upfront cost, federal minimum for new gas furnaces), 92% (two-stage, a middle ground), and 96%+ (modulating/condensing, highest upfront cost but lowest fuel bills). Electric furnaces are rated 100% AFUE because they convert all electricity to heat — but electricity usually costs far more per BTU than gas, so 100% AFUE does not mean cheap to run.

For our 2,000 sq ft Midwest example home, the 96% AFUE gas furnace costs $2,280 more installed than the 80% model ($7,315 vs $5,035). That premium buys about $393.75 a year in fuel savings at $1.40 per therm, so the simple payback is 5.8 years. Over a 15-year horizon with 2% annual fuel-price growth, the upgrade nets about $4,529 in savings after recovering the premium. Payback is fastest where winters are long and gas is expensive — in the South it can stretch past 10 years, so run the Payback tab with your own numbers.

Upfront, electric is cheapest and oil is most expensive. But installation cost and running cost point in opposite directions. For a 2,000 sq ft Midwest home needing about 135 MMBTU of delivered heat per year, first-year fuel costs at default EIA-based prices are roughly $1,968.75 (gas, 96% AFUE), $2,362.50 (gas, 80% AFUE), $3,440.22 (oil, 85% AFUE), and $6,726.26 (electric, 100% AFUE). Over 20 years with 2% annual price growth, lifetime fuel cost is about $47,835.45 for high-efficiency gas versus $163,430.43 for electric — the cheapest furnace to install is usually the most expensive to run. Use the Lifetime Fuel Cost tab to compare with your local utility rates.

Payback = (installed cost of the efficient model − installed cost of the baseline model) ÷ annual fuel savings. Annual fuel savings = annual delivered heat (MMBTU) × fuel price ($/MMBTU) × (1/AFUE_baseline − 1/AFUE_efficient). Worked example: 135 MMBTU of delivered heat × $14.00/MMBTU gas × (1/0.80 − 1/0.96) = 135 × 14 × 0.2083 = $393.75 saved per year. With a $2,280 installed-cost premium, payback = 2,280 ÷ 393.75 = 5.8 years. This is a simple payback — it ignores the time value of money, which is why the tool also shows net savings over a 15- or 25-year horizon with fuel-price growth.

A typical installed quote has four parts plus optional adders. For our $7,315 example: equipment (the furnace itself) about $3,367 (~48%), labor including removal of the old unit about $2,806 (~40%), materials such as venting, gas-line work, condensate drains and a thermostat about $842 (~12%), and permits/inspection about $300. Common adders: ductwork modifications ($500–$1,500), fuel switching such as oil-to-gas ($1,500–$3,000 for the gas line extension and tank removal), and electrical upgrades. If a quote is far below the range this tool shows, check that it includes permits, haul-away, and a load calculation — not just the box.

Usually not a full replacement — but modifications are common. A new high-efficiency furnace may need a new plenum or transition to match its cabinet, ducts outside the conditioned space may need sealing or insulation, and the flue/venting almost always changes when moving from an 80% to a 90%+ condensing furnace. Budget $500–$1,500 for typical duct modifications (the estimator adds about $900 when you tick that box). Full duct replacement is a separate project that can run several thousand dollars. Leaky or undersized ducts can waste 20–30% of the heat your new furnace produces, so ask the contractor to assess them.

In most US jurisdictions, yes — furnace replacement is mechanical work that requires a permit and inspection, and the estimator budgets about $300 (typical range $150–$500). Skipping the permit can void the manufacturer's warranty, create problems when you sell the home, and leave gas or venting mistakes undiscovered. A reputable contractor pulls the permit as part of the job; if a bid is suspiciously cheap, confirm the permit is included.

Different question, different tool. This calculator answers 'what will a new furnace cost me?' — it builds an installed-price estimate from size, efficiency, fuel, and region. It does NOT tell you whether replacement beats repair. For that decision, use our HVAC repair vs replace calculator, which runs the $5,000 rule (repair cost × equipment age), a 0–100 decision engine weighing age, efficiency and refrigerant factors, and a 10-year total-cost comparison. The two tools are complements: decide with the repair-vs-replace tool, then budget with this one.

Sizing and pricing are separate steps. This tool only uses a rough 45 BTU per square foot rule of thumb to pick a price band — it is not a sizing method. For actual sizing, use our furnace size calculator, which works through 7 climate zones, insulation, ceiling height, windows and AFUE to recommend a 40,000–140,000 BTU unit and flags oversizing. Size your furnace there first, then come back here and enter the BTU directly for the most accurate cost estimate.

No — this is not a DIY project. Furnace replacement involves gas-line work, high-voltage electrical, combustion venting, and condensate drainage; mistakes can cause carbon-monoxide poisoning, fire, or explosion. DIY installation also voids most manufacturer warranties and will fail the required permit inspection. Labor is roughly 40% of the installed cost, but it is the part that keeps the other 60% safe and legal. This tool is a planning estimate only — the work itself belongs to a licensed HVAC contractor.

Be careful with dated advice here. The federal Energy Efficient Home Improvement Credit (25C) covered qualifying furnace upgrades placed in service on or after January 1, 2023 and before December 31, 2025 — that published window has ended. For 2026, check your gas/electric utility's rebate programs (many still pay $200–$500+ for 95%+ AFUE units) and the ENERGY STAR rebate finder, and confirm anything tax-related with a tax professional before you count on it. Rebates change yearly, so verify current programs rather than relying on old articles.