How Much Does Furnace Replacement Cost?

It’s no secret that furnace replacement can be costly. The prices of parts and equipment continue to rise and there are many other expenses to consider. But knowing what’s involved can help you plan for your next upgrade. As a leading heating contractor in the San Jose area, we like to share our market knowledge. Hence, you can be more informed and empowered to make decisions as you compare different products or quotes.

The Latest Furnace Replacement Costs

The average cost to replace a furnace (in 2024 dollars) is $4,700. But this is just average; more typically, the price can range from $2,800 to $6,800.1 However, an average price doesn’t tell you much about factors that can determine the ultimate cost of a project. One of the most significant of these is the type of furnace you install. Here are some examples:

  • Natural Gas Furnace ($2,800 to $9,5001): High-efficiency models can cost even more. However, natural gas furnaces tend to lower your utility bills over time. They also produce heat that feels warmer compared to other types of furnaces.
  • Oil Furnace ($4,500 to $8,0001): Oil furnaces tend to last longer than gas furnaces and won’t explode or leak carbon monoxide if they malfunction. Nonetheless, they still require regular maintenance, including filter changes. If you live in an area with harsh winters and don’t mind the high cost of oil, an oil furnace can be effective.
  • Electric Furnace ($1,800 to $7,3001): An electric furnace warms the air via heat coils rather than combustion. It tends to use a lot of electricity. Therefore, electric units aren’t often found in homes in harsh climates; they’re more frequently seen in regions with mild winters.

How Do I Know What My Furnace Replacement Will Cost?

An appliance’s price tag doesn’t determine the full furnace replacement cost. Although the furnace price is a big part of the expense, you must factor in the unit’s size. It’s measured in British Thermal Units (BTUs); a BTU is a unit of measurement that helps determine how much energy a furnace uses.

To determine how many BTUs your furnace should have, multiply the square footage of your home by 40. For a 2,000-square-foot home, this means you need an 80,000 BTU furnace (or higher if winters where you live tend to be very cold).1 You may also need to increase the BTU count if your home is drafty or has high ceilings.

On average, an 80,000 BTU furnace costs about $4,000. A 100,000 BTU furnace, suited for a 2,500-square-foot home, averages $5,000, while a 120,000 BTU furnace (best for a 3,000-square-foot home), is about $6,000.1

Other Furnace Replacement Cost Factors

A furnace's size isn’t the only thing that affects the replacement cost. Other variables to consider are:


A furnace’s efficiency affects how much you save over time. While high-efficiency models are more expensive to install, they can lower your energy bill so you spend less each month. Some of the most efficient and advanced models can cost $10,000 or more, but if you have a furnace that’s 25% more efficient than your old one, multiply that percentage by your current monthly heating bill to see what you can save.

Installation vs. Replacement

The scope of the project impacts costs. For example, if you’re installing the same type of furnace, you probably have everything needed to set it up. However, if you’re converting from one type of furnace to another, or moving the unit’s location, the cost of replacement will increase because of additional work, such as installing a gas line, upgrading your electrical panel, or adding ducts (depending on the furnace and your home’s requirements).


An HVAC contractor typically charges between $75 and $150 per hour for labor.1 When you consider that replacing a furnace can take four to eight hours, labor can take up a significant percentage of your bill.

What Else Do I Need to Consider?

There’s still more to think about when you calculate the cost of furnace replacement. Some other variables that are in play include:

  • Brand: Some manufacturers charge less for similar types of furnaces than others. A higher-priced furnace may be better constructed and have more features. The lowest prices often reflect lower-quality equipment and materials.
  • Permits: The price of the permit should be included in your quote, but always ask the contractor. Depending on where you live, a permit and the required inspection can cost from $400 to $1,500.2
  • Removing Your Old Furnace: Disposing of a furnace yourself can be difficult and time-consuming. Most furnace installers can handle this for you, but depending on various factors, this can cost up to several hundred dollars.
  • Warranty: Check whether the manufacturer includes a warranty with the furnace or the warranty costs extra. Also, read the fine details of your home warranty to see if it covers furnaces. If not, find out whether a heating unit can be added to the plan.
  • Tax Credits: Installing a high-quality, high-efficiency furnace costs more upfront, but you may save later if it’s eligible for a tax credit. If this is the case, you can save a few hundred dollars on your taxes. Consult with a furnace replacement professional and an accountant for information on the latest tax laws.

Contact Trio Heating and Air for a Furnace Replacement Quote

We install the highest-quality heating products for customers in San Jose, CA. Familiar with all makes and models, we help make informed decisions and offer transparent pricing so costs are less of a concern. Our highly-trained professionals aim to make the furnace replacement process as easy as possible. If your system needs frequent repairs, is reaching the end of its lifespan, or temperatures at home are inconsistent, contact us today to speak with our heating installation and replacement specialists.



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