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How Much Does a New Furnace Cost in 2023?

If you’re wondering how much is a new furnace going to cost you, the general answer is somewhere between $2,800 and $7,000, with an average cost of $4,700, including installation. However, many factors affect new furnace costs. 

These can include the type of furnace, the fuel source, the size of the unit, and the efficiency rating. Let’s take a look at each of these factors in detail, and discuss how they can affect the overall cost of a new furnace.

You’ll need to consider the following factors that go into the cost of your replacement when researching how much to replace a furnace. Another thing you should keep in mind is the impact of inflation on the prices of HVAC systems.

Type of Furnace

One of the most significant factors that can affect new furnace costs is the type of furnace. There are several different types of furnaces available, each with its own advantages and disadvantages.

Gas Furnaces

Gas furnaces are the most common type of furnace and they tend to be less expensive than electric or oil-fired furnaces. They also tend to be more efficient and have lower operating costs.

Electric Furnaces

Electric furnaces are also common, though less so than gas furnaces. They tend to be more expensive upfront than gas furnaces, but they have lower operating costs and are easier to maintain.

Oil Furnaces

Oil Furnaces are less common than gas furnaces but offer an alternative to natural gas or propane as fuel. They may be more expensive to operate and maintain compared to gas furnaces depending on fuel prices.

Fuel Source

Another factor that can affect the new furnace costs is the fuel source. Natural gas is the most common fuel source for furnaces, and it tends to be the most affordable. Propane is also a popular fuel source, but it can be more expensive than natural gas. Oil is less common as a fuel source for furnaces, but it can still be used in some areas.

Size of the Unit

The size of the unit is also a significant factor in determining the cost of a new furnace. A larger furnace will typically cost more than a smaller furnace, as it will require more materials and labor to install. 

However, it is important to note that a larger furnace may also be more efficient, which can lead to lower operating costs in the long run.

During your HVAC installer’s assessment of your furnace needs, they will do a Manual J load calculation using industry standards set by ACCA. This calculation takes more than just the size of your home into account. 

It also considers the number of windows and doors in your home, the layout, the insulation, and other factors. This will determine the size unit required to properly heat and cool your home.

A larger system is going to cost more but you can run into serious issues with malfunctions and poor efficiency if you fail to install the recommended size system for your home.

Efficiency Rating

The efficiency rating of a furnace can also have a big impact on the cost. Furnaces with a higher efficiency rating will typically cost more upfront, but they will also have lower operating costs and will save you money in the long run.

Furnaces are rated by their annual fuel utilization efficiency (AFUE) which is a measure of how much of the fuel used by the furnace is converted into heat, compared to how much is lost through exhaust. A furnace with a 90% AFUE rating, for example, will convert 90% of the fuel it uses into heat, while 10% will be lost through exhaust.

Variable Speed Systems

Variable speed HVAC systems are designed to automatically adjust their fan speed to meet the heating or cooling needs of your home. This allows them to operate more efficiently and effectively than traditional HVAC systems, which typically only have one fan speed. 

The cost of a variable-speed HVAC system will depend on many factors, including the size of the residence, the complexity of the system, and the cost of installation.

On average, variable-speed HVAC systems tend to be more expensive than traditional systems, but they can also offer significant energy savings over time, which can help to offset their higher upfront costs. 

Additionally, some utility companies offer rebates or incentives for the installation of energy-efficient HVAC systems, which can lower the overall cost.


The cost of installation is also a significant factor in determining the overall cost of a new furnace. The installation process can vary depending on the type of furnace, the location of the furnace, and the complexity of the installation. A professional and experienced HVAC contractor should be consulted for the installation, which will also include additional costs.

One such addition affecting furnace replacement costs is matching the right equipment to your specific needs and existing systems to ensure that you are getting the most cost-effective solution and a proper installation. 

This can have a significant impact on your overall costs, as you may be encountering a situation where your HVAC technician may be matching upgraded equipment to older components such as existing ductwork, or having to remove existing components and replace them with more appropriate ones.

This is especially true when you are dealing with existing antiquated components or switching from one type of system to another. For instance, there can be additional costs for removing certain components from a gas-fueled system if you decide to switch to an electric system. Likewise, it can cost more to have additional components added to shift to a gas-fueled system.


The furnace’s warranty can also impact the final cost. The length of warranty and the coverage area can vary significantly among different brands and models. It is important to compare and consider the warranty before making a final decision.

You may also wish to pay for additional warranties beyond those included by the manufacturer or installer to provide more coverage for your system. Consult with an American Home Water and Air HVAC expert to get the details you need about what system would best work for you.

By considering each of these factors and understanding how they can impact the overall cost, you can make an informed decision about which furnace is best for you.                                                           

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