Furnace Replacement: Cost, Efficiency and When to Replace

Updated Oct 29, 2026 2 min read By the WieHow – Home, Energy & Money Guides editorial team
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Quick answer

Replacing a gas furnace typically costs a few thousand dollars installed, more for high-efficiency condensing models or complex ductwork. Consider replacement if your furnace is over 15–20 years old, needs frequent repairs or your heating bills keep rising. Before buying, compare a high-efficiency furnace with a heat pump using your local energy prices.

On this page
  1. Signs it's time to replace
  2. Efficiency ratings explained
  3. Furnace or heat pump?
  4. Getting fair quotes

Furnaces rarely fail at a convenient time. Knowing the warning signs and options in advance helps you avoid a rushed, expensive decision in the middle of winter.

Signs it's time to replace

  • Age over 15–20 years
  • Repairs every season, or a single repair costing a large share of a new unit
  • Uneven heating and rising energy bills
  • Yellow burner flames, soot or a cracked heat exchanger (a safety issue — call a technician)

Efficiency ratings explained

AFUE ratingMeaning
80%Standard efficiency; 20% of fuel energy is lost through the flue
90–98%Condensing furnace; much less energy wasted, needs PVC venting and a condensate drain

In cold climates, a high-efficiency furnace usually pays off over its lifetime. In mild climates, the savings may be smaller.

Furnace or heat pump?

If you also need a new air conditioner, a heat pump can replace both systems. Compare running costs with your own energy prices:

Heat Pump vs. Gas Furnace Cost CalculatorCompare yearly running costs side by sideTry the calculator →

Getting fair quotes

  1. Ask for a load calculation (Manual J) rather than matching the old unit's size.
  2. Compare equipment model numbers, warranty terms and what's included (permits, removal, thermostat).
  3. Ask about utility rebates for high-efficiency furnaces or heat pumps.
Loan Payment CalculatorMonthly payment and total interestTry the calculator →
Carbon monoxide safety: Make sure every home with a fuel-burning furnace has working CO alarms near sleeping areas.

Frequently asked questions

Should I repair or replace an old furnace?

A common rule: if the repair costs more than about a third of a new furnace and the unit is older than 15 years, replacement is often the better investment.

How long does installation take?

A straightforward replacement often takes one day; changes to venting, gas lines or ductwork can take longer.

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