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Installing a New Furnace: How Much Does It Cost?

Alec Dale 2017-01-22

You will definitely notice if your furnace stops working at this time of year. Sometimes it’s an easy fix but at some point you may need to buy a new unit. When putting in a new furnace becomes a reality, you will need to think about some cost considerations before you make your final purchase decision.

The Right Furnace

First off, you will need to determine the type of furnace to install. It’s likely that there are new choices available now that didn’t even exist when your original furnace was installed. The most common type of furnace for residential use is powered by natural gas. The typical cost of a standard efficiency natural gas furnace is between $2,250 and $2,800. If you pick a higher efficiency furnace the price might be higher.

Oil furnaces cost between $2,200 and $2,500 to install but they tend to be less efficient than natural gas. If existing duct work needs to be adapted, this price will go up. A larger, more energy efficient furnace or factors like a complex floor plan can make the cost as high as $10,000.

Electric heat comes from little registers installed around the border of each room. Average installation for electric heat will cost between $1,800 and $2,700 but this option isn’t ideal for heating bigger spaces. It’s also more expensive than natural gas.

One final and newer option is a heat pump, which draws heat from the air or ground. These can be used as air conditioning units in warmer months but they can be limited by cold climates. To learn more about the heat pumps, read this Toronto Star news information for more information.


When it comes to gas furnaces, the options it comes with will affect the price. First of all, look at heat output. If your home is average size, a 60,000 BTU furnace will be well-served. One with a higher BTU will cost more and will probably have an inconsistent comfort level.

You need to consider efficiency as well. Most newer models are rated 90 percent efficient or better whereas some are even in the 94 to 95 percent range. This seemingly small increase in efficiency will mean lower utility costs. Sometimes, it might be worthwhile to invest in a new furnace. You can choose between different furnaces at Climate Experts.

Labour Costs

The price of labour for a furnace install isn’t fixed, but most companies charge around $75 per hour for a licensed installer and $50 per hour for a helper. For an installation that takes eight hours, it will cost $1,000 in just labour. If your home needs extensive duct work repair, replacement, or modification, or if the new furnace is a lot larger or smaller than the existing unit, the costs for the installation will be higher.


There are two different warranty types that cover installs and function. The first is the manufacturer’s warranty. This comes with the furnace and protects you against defects int he furnace, like pilot lights that don’t stay lit, or inoperable fans. A contractor’s warranty covers the labour that will be needed to make repairs if the furnace doesn’t work right. A contractor’s warranty is usually good for five to 10 years. Some contractors will charge more for extended warranties.

Get all warranties in writing and make sure they specify what is covered, for how long it is covered, and what the contractor will do to fix any problems.

Tip: choose a high-efficiency furnace with 94 percent efficiency or higher, with the same overall heating capacity as the one you’re replacing, unless you’ve been told otherwise. Pick one with a variable speed blower for the best efficiency possible.

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