Furnace Replacement Cost 2025: Gas, Electric & Oil Heater Prices
When your furnace stops working in the middle of a freezing January night, it’s not just an inconvenience—it’s an emergency. Replacing an old heating unit is expensive, but modern systems are far more efficient and can save you hundreds on energy bills. How much does furnace replacement cost in 2025?
The national average cost to replace a furnace ranges from $2,800 to $6,500. A standard gas furnace installation typically costs around $4,500, while high-efficiency models or complex conversions from oil to gas can exceed $10,000.
In this guide, we break down the prices of Gas, Electric, and Oil furnaces, explain what AFUE ratings mean for your wallet, and help you decide if it's time to repair or replace.
⚠️ Carbon Monoxide Warning
Gas and oil furnaces produce Carbon Monoxide (CO), an odorless and deadly gas. Improper installation of the exhaust vent can be fatal. Never attempt a DIY installation. Always hire a licensed HVAC technician. (See our HVAC System Guide).
1. Average Cost by Fuel Type
The fuel source is the biggest factor in both installation price and monthly operating costs.
| Fuel Type | Unit + Install Cost | Pros & Cons |
|---|---|---|
| Natural Gas | $3,000 - $7,000 | Most popular. Low operating cost, but requires gas lines. |
| Electric | $2,000 - $4,500 | Cheapest to install, but VERY expensive to run monthly. |
| Oil | $4,500 - $9,000 | Common in the Northeast. Requires an oil tank refill. |
2. Understanding Efficiency: What is AFUE?
You will see the term AFUE (Annual Fuel Utilization Efficiency) everywhere.
Standard Efficiency (80% AFUE): Cheaper upfront ($3,000). For every dollar you spend on gas, 80 cents heats your home and 20 cents goes up the chimney.
High Efficiency (90% - 98% AFUE): More expensive upfront ($5,000+). Uses a secondary heat exchanger to capture escaping heat. Saves money long-term.
3. Labor and Hidden Factors
About 50% of the quote is labor. HVAC technicians charge $75 to $150 per hour.
Additional costs may include:
- Ductwork Repair: Leaky ducts waste heat. Repairs cost $500 - $2,000.
- Electrical Upgrades: Electric furnaces need a dedicated circuit. (See Electrical Panel Cost).
- Removal: Hauling away the old heavy unit costs $100 - $300.
- Thermostat: Upgrading to a smart thermostat (Nest/Ecobee) adds $200 - $400.
4. Repair vs. Replace?
The "50% Rule" is the industry standard. If the repair cost is 50% of the cost of a new unit, and your furnace is over 15 years old, stop throwing money away and replace it.
Signs of Failure:
- Yellow burner flame (instead of blue) - DANGER: Possible Carbon Monoxide.
- Rising energy bills without weather changes.
- Strange banging or squealing noises.
Conclusion
Investing in a high-efficiency furnace increases your home's value and comfort. While the upfront cost is high, the monthly savings on natural gas can pay for the upgrade within 5-7 years.
Thinking about summer too? Check our guide on Central Air Conditioner Costs to see if you can replace both units together for a discount.
Disclaimer: Costs are national averages for 2025. Brands like Carrier, Trane, and Lennox vary in price. High-efficiency units may qualify for federal tax credits.