Furnace Replacement Cost in 2026: Gas vs Electric
When the furnace dies mid-winter, you need answers fast. The short answer: a new furnace typically costs $3,500–$8,000 installed in the US in 2026. Gas furnaces run $3,500–$7,500; electric furnaces $2,500–$6,000. High-efficiency models and complex installs push past $10,000. Typical range: $3,500–$8,000 installed (gas $3,500–$7,500 · electric $2,500–$6,000)What’s included: the new furnace, installation labor and…
When the furnace dies mid-winter, you need answers fast. The short answer: a new furnace typically costs $3,500–$8,000 installed in the US in 2026. Gas furnaces run $3,500–$7,500; electric furnaces $2,500–$6,000. High-efficiency models and complex installs push past $10,000.
Typical range: $3,500–$8,000 installed (gas $3,500–$7,500 · electric $2,500–$6,000)
What’s included: the new furnace, installation labor and standard hookups. Ductwork changes, new venting and permits can add to the total.
Geography: US national ranges · Updated October 2026
Quick Answer: Furnace Replacement Costs by Type
| Furnace type | Typical installed cost (2026) |
|---|---|
| Gas, single-stage (80% AFUE) | $3,500–$5,500 |
| Gas, two-stage (95%+ AFUE) | $5,000–$7,500 |
| Gas, modulating (98% AFUE) | $6,500–$10,000 |
| Electric furnace | $2,500–$6,000 |
| Oil furnace | $5,000–$9,000 |
AFUE = Annual Fuel Utilization Efficiency. Higher AFUE = less fuel wasted.
Gas vs Electric vs Oil: Upfront Cost and Running Cost
| Factor | Gas furnace | Electric furnace |
|---|---|---|
| Upfront cost | Higher | Lower |
| Monthly running cost | Lower (gas is cheap heat) | Higher (electricity costs more per BTU) |
| Lifespan | 15–20 years | 20–30 years |
| Maintenance | Annual tune-up needed | Minimal |
| Best for | Cold climates, homes with gas lines | Mild climates, homes without gas service |
Oil furnaces are the third option, mostly in older Northeastern homes: $5,000–$9,000 installed (see the table above). Rule of thumb: if your home already has a gas line and winters are harsh, gas wins on lifetime cost. If there’s no gas line, extending one ($500–$2,000+) often erases the savings — go electric or consider a heat pump.
Furnace Cost by Size (BTU) and Home Size
Furnaces are sized in BTU (British Thermal Units). A common rule of thumb is roughly 30–60 BTU per square foot depending on climate zone — colder climates sit at the top of that range. That puts a 2,000 sq ft home at roughly 60,000–120,000 BTU. Larger homes need higher BTU output, which raises the price. But treat the rule of thumb as a starting point only: a Manual J load calculation is the correct way to size a furnace, and you should never size by the old unit alone.
Where Your Money Goes: Equipment, Labor and Extras
- The furnace and its installation: the bulk of the bill — $2,500–$10,000 depending on fuel type, staging and AFUE (see the table above).
- Ductwork and venting work, if needed: new or modified ducts add $1,000–$5,000; high-efficiency (condensing) furnaces need PVC venting and a condensate drain — $300–$800 if not already present.
- Permits, inspections and extras: permits and inspections run $100–$400 in most jurisdictions, and gas work always requires sign-off. Optional extras include a smart thermostat ($150–$300 installed) and extending a gas line ($500–$2,000+) if your home doesn’t have one.
Worked Example: A 2,000 Sq Ft Home in a Cold Climate
Say your gas furnace gives out in a 2,000 sq ft home. By the rule of thumb above, that home needs roughly 2,000 × 30–60 BTU = 60,000–120,000 BTU. You choose a gas, two-stage, 95%+ AFUE model — and because it’s a condensing furnace, your home also needs the PVC venting and condensate drain it doesn’t have yet. Using only the ranges from the tables above:
- Furnace, installed (gas, two-stage, 95%+ AFUE): $5,000–$7,500
- PVC venting & condensate drain (not already present): $300–$800
- Permit & inspection: $100–$400
- Total: $5,000 + $300 + $100 = $5,400 at the low end; $7,500 + $800 + $400 = $8,700 at the high end — so $5,400–$8,700 all-in
What Drives the Price: 5 Cost Factors
- Efficiency rating. Each AFUE step up adds ~$1,000–$2,000 upfront but cuts fuel bills 10–30%.
- Home size. Larger homes need higher BTU output — roughly 30–60 BTU per sq ft depending on climate.
- Ductwork. New or modified ducts add $1,000–$5,000. Undersized ducts strangle even the best furnace.
- Venting & condensate. High-efficiency (condensing) furnaces need PVC venting and a condensate drain — $300–$800 if not already present.
- Permits & inspections. $100–$400 in most jurisdictions; gas work always requires sign-off.
How Furnace Costs Vary by Region
Furnace prices follow your winters. In cold-climate states — the Upper Midwest, New England and the northern Plains — homes need higher-BTU furnaces, and installers book up fast once heating season starts, so quotes tend to sit in the upper half of the national ranges. Oil furnaces are mostly a story of older Northeastern homes. In mild-climate regions, smaller units are common and the same work usually lands lower. Wherever you live, the cheapest furnace quote of the year is rarely the one you get during the first cold snap — replacing in spring or summer, when contractors discount heating work, is the regional advantage almost anyone can use.
Repair or Replace? How to Decide
- Age: over 15 years (gas) or 20 years (electric) → lean replace.
- Repair cost: if the fix exceeds 30–50% of replacement cost → replace.
- Energy bills climbing with no other explanation → the furnace is losing efficiency.
- Frequent breakdowns (2+ service calls in 2 years) → replacement is cheaper than the repair treadmill.
- Safety issues — a cracked heat exchanger (carbon monoxide risk) means immediate replacement, no debate.
Is a High-Efficiency (95%+ AFUE) Furnace Worth It?
In cold climates with high gas usage, yes — each AFUE step up cuts fuel bills 10–30%, and the fuel savings typically pay back the premium in 5–8 years. In mild climates, mid-efficiency is the sweet spot: you’ll never burn enough fuel for the top-tier models to repay their higher price.
Ways to Lower Your Furnace Replacement Bill
- Replace in spring/summer. HVAC contractors discount heating work in the off-season.
- Bundle AC + furnace. Replacing both together typically saves $1,000–$2,000 versus separate jobs.
- Check state and utility rebates. The federal energy-efficiency tax credit for furnaces (Section 25C) ended on December 31, 2025, so it no longer applies to new installs — but many states and gas utilities still offer $200–$1,000 rebates for high-efficiency (97%+ AFUE) models.
- Right-size, don’t oversize. A proper load calculation prevents paying for capacity you’ll never use.
Red Flags in a Furnace Quote
- Nobody looked at the system. A quote is written up without anyone checking your ductwork, venting or gas line.
- Heat-exchanger scare, no evidence. You’re told the heat exchanger is cracked — which does mean instant replacement — but shown no photo or camera proof. Ask to see it.
- Permit not mentioned. Gas work requires a permit and sign-off; a quote that’s silent on both is cutting a corner.
- Top-tier AFUE, no math. You’re pushed to the highest-efficiency model with no payback calculation for your climate and gas usage.
- Vague line items. Charges like “miscellaneous” or “extras” with no dollar detail behind them.
Questions to Ask Before You Hire
- What size (BTU) and AFUE are you quoting — and is it based on a load calculation?
- Does the price include new venting and a condensate drain, if my home needs them?
- Are the gas permit and inspection included, and who schedules them?
- Do I qualify for any state or utility rebates on this model?
- What labor warranty comes with your installation?
Sources & how we built this range. We compile typical ranges from contractor pricing data, manufacturer guidance and published market data, then sanity-check them against sources like the U.S. Department of Energy, ENERGY STAR and the IRS. See exactly how ranges are built and updated on our Methodology page. Always get local written quotes — actual costs vary by market and home. Furnace work involves gas and combustion — always use a licensed HVAC contractor.
Related cost guides: AC replacement cost · water heater replacement cost
HomeFixPrices Team
The HomeFixPrices editorial team researches home repair and improvement costs across the US and Canada, comparing contractor pricing, supplier data and homeowner reports so you know the fair price before you hire.
How much does it cost to install a new furnace in 2026?
Typically $3,500–$8,000 installed. Gas furnaces run $3,500–$7,500 and electric furnaces $2,500–$6,000, while high-efficiency models and complex installs can push past $10,000.
Is gas or electric heat cheaper to run?
Gas, in most cases — gas is cheap heat, so monthly running costs are lower, though the furnace itself costs more upfront. Electric furnaces cost less to buy and install but more per month, since electricity costs more per BTU.
Is a 95–96% AFUE furnace worth the extra cost?
In cold climates with high gas usage, yes — the fuel savings typically pay back the premium in 5–8 years. In mild climates, mid-efficiency is the sweet spot.
How long does a furnace last?
A gas furnace typically lasts 15–20 years; an electric furnace 20–30 years. Past those ages, lean toward replacement rather than major repairs.
Are there federal tax credits for furnaces in 2026?
No. The federal energy-efficiency tax credit for furnaces (Section 25C) ended on December 31, 2025, so it no longer applies to new installs. Many states and gas utilities still offer $200–$1,000 rebates for high-efficiency (97%+ AFUE) models, so check those instead.
If my furnace is 15+ years old and the repair is over $1,000, should I replace it?
Probably, yes. At 15+ years a gas furnace is at the end of its typical life, and the usual rule is to replace when a repair exceeds 30–50% of the replacement cost. Add climbing energy bills or repeat breakdowns and replacement is the cheaper path.
