How much does a new furnace cost in 2026?

A new furnace in 2026 costs 4,000 to 8,500 dollars installed for a standard 80 percent AFUE gas furnace, 6,500 to 12,000 dollars for a 95 to 98 percent AFUE high efficiency gas furnace, and 5,500 to 10,000 dollars for an electric furnace. Prices are higher for larger homes, two stage or modulating furnaces, and complex retrofit projects that require new ductwork, venting, or a gas line upgrade. The national average for a mid range 96 percent AFUE gas furnace in a 2,000 square foot home is around 7,500 dollars installed.

What is AFUE and what AFUE should I pick?

AFUE stands for Annual Fuel Utilization Efficiency, and it measures how much of the fuel a furnace burns is turned into usable heat for the home. An 80 percent AFUE furnace wastes 20 percent of the fuel as exhaust, while a 96 percent AFUE furnace wastes only 4 percent. The federal minimum for new gas furnaces in most of the United States is 80 percent, and the higher end is 98.5 percent for modulating condensing units. Most homeowners choose 95 to 96 percent AFUE because the energy savings over a 15 to 20 year lifespan offset the higher upfront cost compared to an 80 percent furnace.

What size furnace does my home need?

Furnace size is measured in BTUs, or British Thermal Units, and most homes need 30 to 60 BTUs per square foot depending on the climate, the insulation level, and the window quality. A 1,500 square foot home in a moderate climate usually needs a 60,000 to 80,000 BTU furnace. A 2,500 square foot home in a cold climate can need a 100,000 to 120,000 BTU furnace. A Manual J load calculation, performed by an HVAC contractor, is the right way to size a furnace, since oversizing leads to short cycling and higher bills while undersizing leads to cold spots and frozen coils in winter.

Are heat pumps a good alternative to a new furnace?

Yes. Cold climate heat pumps, which are rated to provide full heating capacity down to 5 or even negative 15 degrees Fahrenheit, are a strong alternative to a furnace in most US climate zones. The Inflation Reduction Act offers a 30 percent tax credit, up to 2,000 dollars, for a qualifying heat pump installed in 2026, plus a state level rebate of up to 8,000 dollars for low and middle income households. Heat pumps also provide air conditioning in the summer, which a furnace does not, and they can reduce total heating and cooling costs by 30 to 50 percent compared to a traditional furnace and central air system.

How long does a new furnace last?

A new gas furnace typically lasts 15 to 20 years, with high efficiency units and properly sized units on the longer end of the range. Electric furnaces can last 20 to 30 years because they have fewer moving parts. Annual maintenance, including a filter change, a burners inspection, a heat exchanger check, and a blower motor cleaning, can extend the life of a furnace by 3 to 5 years. Most manufacturers offer 10 year parts warranties and 20 year heat exchanger warranties, and labor warranties from the installing contractor are usually 1 to 10 years.

Furnace Replacement Cost 2026 Pricing Guide

What Goes Into a Furnace Replacement

A furnace replacement is more than just swapping the old unit for a new one. The HVAC contractor performs a Manual J load calculation to size the new unit, removes the old furnace, modifies the ductwork or gas line if needed, installs the new furnace, connects the venting, runs new electrical wiring for the blower and the control board, and tests the system for safe operation. Most replacements take 1 to 2 days for a straightforward swap and 3 to 5 days if ductwork or a gas line upgrade is needed. A new thermostat, often a smart thermostat, is usually installed at the same time and is sometimes included in the quote.

2026 Price Ranges by Type

A standard 80 percent AFUE gas furnace in 2026 costs 4,000 to 6,500 dollars installed for a 1,500 to 2,000 square foot home. A 95 to 96 percent AFUE high efficiency gas furnace costs 6,500 to 9,500 dollars installed, with the price driven by the two stage or modulating gas valve, the variable speed blower, and the stainless steel secondary heat exchanger. A 98 percent AFUE modulating furnace costs 9,500 to 14,000 dollars installed, and is often paired with a smart thermostat and zoning controls. Electric furnaces run 5,500 to 10,000 dollars installed, and they are common in regions without natural gas service such as the Pacific Northwest and parts of the Northeast.

How Furnace Efficiency Affects Long Term Cost

The efficiency of a furnace has a big effect on the lifetime cost. An 80 percent AFUE furnace burns 1.25 therms of natural gas to deliver 1 therm of heat, while a 96 percent AFUE furnace burns 1.04 therms to deliver 1 therm. The savings add up over a 15 to 20 year lifespan, especially in cold climates. For a 2,000 square foot home in Chicago, the annual heating bill is roughly 1,200 dollars with an 80 percent furnace and 1,000 dollars with a 96 percent furnace, a savings of 200 dollars per year or 3,000 to 4,000 dollars over the life of the unit. The federal Inflation Reduction Act extends a 30 percent tax credit, up to 600 dollars, on qualifying high efficiency gas furnaces installed in 2026.

What Affects the Final Bill

Several variables can push the price above the standard range. Ductwork modifications, including adding returns, sealing leaks, or resizing trunks, can add 1,500 to 5,000 dollars. A gas line upgrade from a low pressure to a high pressure line costs 1,000 to 3,000 dollars. A new flue liner for a high efficiency furnace costs 300 to 1,200 dollars. A new thermostat, especially a smart thermostat, costs 100 to 400 dollars. Removing and disposing of the old furnace is usually included, but asbestos containing ductwork or insulation in older homes can add 500 to 2,500 dollars for abatement. Permit fees vary by municipality but are usually 50 to 300 dollars.

Heat Pump vs Furnace in 2026

Heat pumps have become a strong alternative to traditional furnaces in most US climate zones, especially with the Inflation Reduction Act incentives in place. A cold climate heat pump rated to provide full heating capacity down to negative 15 degrees Fahrenheit costs 8,000 to 18,000 dollars installed, more than a high efficiency gas furnace. The trade off is that the heat pump also cools the home in the summer, eliminating the need for a separate air conditioner, and the combined heating and cooling cost is usually 30 to 50 percent lower than running a furnace and central air. The federal heat pump tax credit is 30 percent up to 2,000 dollars, and many states add their own rebates of 1,000 to 8,000 dollars. A dual fuel system that pairs a heat pump with a smaller gas furnace is a popular compromise in cold climates.

How to Pick a Furnace Contractor

Start with a written Manual J load calculation from at least three HVAC contractors. The contractor should visit the home, measure the ductwork, inspect the insulation, and calculate the heating and cooling load. Ask for an itemized quote that lists the furnace model, the AFUE rating, the warranty, the thermostat, the ductwork, and any required electrical or gas line work. Check reviews on Google, the Better Business Bureau, and Nextdoor. Confirm the company carries general liability insurance and workers compensation coverage, since furnace work involves gas lines, high voltage electrical, and heavy lifting. Ask whether the company does the work in house or subcontracts the ductwork, since subcontracted work is often the source of warranty disputes.

Financing and Rebates

Many HVAC contractors offer 0 percent APR financing for 12 to 60 months through Synchrony, Service Finance, or GreenSky, which can make a high efficiency upgrade more affordable. The federal Inflation Reduction Act high efficiency heating tax credit of 30 percent up to 600 dollars applies to qualifying furnaces installed in 2026. State and utility rebates are also common, with amounts ranging from 100 to 2,000 dollars for a high efficiency gas furnace and up to 8,000 dollars for a qualifying heat pump. The Department of Energy High Efficiency Electric Home Rebate Program, or HEEHR, launched in 2024, provides 14,000 dollars in point of sale rebates for low income households, and many states are still in the rollout phase. Check the dsireusa.org database for the latest incentives in your state.

When to Repair vs Replace a Furnace

The general rule is to replace a furnace if it is over 15 years old, if the repair is more than 30 percent of the cost of a new unit, if the heat exchanger is cracked, or if the unit is using R-22 refrigerant in a heat pump system that is being phased out. Repair is the right call for younger units with a single failed component such as a blower motor, an igniter, or a control board. A cracked heat exchanger is a safety hazard and requires a full replacement, not a repair, because the crack can leak carbon monoxide into the home. A common test is whether the projected repair bill recovers the cost in 5 years through energy savings, which is the same payback test used for new windows and insulation.