A furnace replacement budget should identify the fuel, equipment, airflow work, and installation changes. Replacing a gas furnace with a similar model differs from converting to electric resistance heat or installing a condensing furnace with a new venting arrangement. A house-specific proposal is more dependable than a national price detached from those details.
We have not established a representative 2026 national installed-price dataset for furnaces. The numbers below are transparent planning assumptions. They explain how to evaluate your own quotes without presenting invented market averages.
Compare the three decisions separately
| Option | Installation questions | Running-cost question |
|---|---|---|
| Gas furnace replacement | Gas supply, venting, combustion checks, blower and coil compatibility | What gas rate and seasonal efficiency apply? |
| Electric resistance furnace | Available electrical capacity, circuits, air handler and controls | What will required heating energy cost at your electricity rate? |
| Higher-efficiency gas furnace | Intake/exhaust route, condensate handling, installation access | Will fuel savings justify the installed premium? |
An electric resistance furnace is not a heat pump. If a proposal uses the word “electric,” identify which technology is being offered before comparing operating costs.
ENERGY STAR distinguishes furnace efficiency requirements by region. A certification label is useful product information; it does not replace an installed-cost calculation for your house.
A furnace budget example
Suppose the following amounts are entered into a planning worksheet. They are hypothetical, exclude financing and sales tax, and are not contractor prices.
| Illustrative component | Assumed cost |
|---|---|
| Furnace and controls | $2,800 |
| Removal, installation, and startup labor | $2,300 |
| Venting and condensate work | $700 |
| Permit allowance | $200 |
| Illustrative total | $6,000 |
If one quote omits the $700 category, find out whether no work is needed or the work is excluded. Those are very different answers. Ask for the discharge location and restoration responsibility before signing, particularly where finished rooms or an inaccessible attic complicate the route.
For sealed-combustion equipment, DOE describes separate outdoor combustion-air and exhaust paths. Have the installer determine approved materials, routing, clearances, and whether other appliances sharing an old vent are affected. These are professional design and safety matters.
What AFUE tells you
DOE defines annual fuel utilization efficiency, or AFUE, as seasonal useful heat output divided by fuel input. It is not the efficiency of your entire home, and a furnace’s fuel rating should not be treated as a measurement of duct losses.
For a simplified comparison, assume a home needs 60 million BTU of useful heat during a year. Using 100,000 BTU per therm, an 80% AFUE furnace would require 750 therms; a 95% model would require about 632 therms. At an illustrative $1.50 per therm, modeled fuel costs are $1,125 and $947, a difference of about $178 annually.
If the higher-efficiency installed option costs $1,200 more, simple payback is about 6.8 years under those assumptions. A $2,400 premium takes about 13.5 years. These calculations omit electricity for the blower, maintenance, financing, changing rates, and differences between rated and actual performance.
The same heating requirement supplied by idealized electric resistance heat requires roughly 17,584 kWh, using 3,412.142 BTU per kWh. At an assumed $0.18/kWh, that is about $3,165. This does not make gas universally cheaper: change the rates, heat requirement, or technology and the answer changes. Use the heat pump and gas comparison to examine a heat-pump alternative.
Capacity and comfort belong in the contract
Ask for the proposed furnace input and output capacity, not just its cabinet size. Explain which rooms are uncomfortable and whether the old system had noise or airflow problems. If the contractor proposes retaining a cooling coil, request confirmation that the new blower arrangement works with it.
An efficiency upgrade and a comfort upgrade can overlap, but one does not guarantee the other. List the specific problem being addressed so you can judge the completed job against an agreed outcome.
Final questions before purchase
Confirm the warranty for parts and labor separately, registration responsibility, emergency-service terms, and maintenance requirements. Identify the party responsible for permits and final inspection. A different fuel type may also affect utility account costs; include continuing fixed charges if another gas appliance remains.
Get the complete furnace scope in writing, then compare alternatives over the same time horizon. The least expensive box and the least expensive heating plan are not necessarily the same purchase.