July 1, 2021

Cost to Replace Furnace in 2021


How Much is a Furnace Replacement?

There are many factors and features that affect the cost to replace furnace.

The lack of heat in your home can be highly uncomfortable. During the frigid months in Calgary, you’re looking for the best furnace repair company to make sure you’re ready with reliable heating for the cold weather ahead.

An efficient furnace is essential in keeping your home, office warm while preventing the winter cold from freezing the pipes and lowering your energy costs.

As much as it is crucial to ensure your furnace is in good condition, it is also important to note when it approaches the 15-year-old mark. Most times, a furnace is repairable, but when it becomes clear that there are too many problems, it’s a good idea to purchase a new model.

Are you looking to install an air conditioner in your Calgary home? Read about air conditioning costs here.

When You Need to Replace Your Furnace


There are many reasons you would want to replace your furnace, including;

Once you decide to replace your furnace, you want to spend your money on a highly efficient unit.

How To Determine the Efficiency of a Furnace

To determine the efficiency of any furnace, you look at its AFUE (Annual Fuel Utilization Efficiency) rating. This rating shows how much fuel the furnace converts into heat against the amount of energy lost during the burning process.

For instance, a furnace with a 90% AFUE rating means that the furnace uses 90% of fuel to convert to heat and losses 10%. The higher the AFUE rating, the more efficient the furnace is.

In Canada, the government mandates that all furnaces sold must be highly efficient and with an AFUE rating of 92% or more. The most efficient furnaces possess a rating of 98% to 99%. AFUE rating declines as the unit ages due to pollutants, aging of the heating unit and its components, damaged parts, and clogged filters.

The Average Cost of a High-Efficiency Furnace in 2021

The average cost for a new high-efficiency furnace here in Canada, including the installation cost, is between $3,000 and $7,000.

Types Of Furnaces

When looking to replace your furnace, it is essential to find the one that aligns with your budget and is efficient enough. These are the common types of furnaces in Canada.

  • Natural gas furnace: Most homeowners prefer to use a natural gas furnace. It is inexpensive to operate and initially costs between $3,500 to $6,000, depending on its efficiency. Gas furnaces have an AFUE of 95-98%.
  • Propane furnace: This furnace has an AFUE rating of 80-94%, which is efficient though not the best. It is a reliable fuel source, but you must have space for a tank that stores the propane. Depending on its size and efficiency, a propane furnace’s original cost is $3,000-$5,000.
  • Electric furnace: This furnace is a dependable choice for homes with no natural gas supply. A standard electric furnace functions at an efficiency rate of 100%, which means there is no energy waste. It can cost from $1,000 to $3,000. These furnaces are quite expensive because the cost of electricity is generally high.
  • Oil furnace: These furnaces are not as standard as natural gas furnaces. They can serve well in areas where gas is unavailable. They have an 80-90% efficiency rating and generally cost between $1,000 to $3,000.

Factors That Influence the Cost to Replace a Furnace

There are various factors that affect the cost to replace furnace in 2021.

1.      The Brand

The brand behind the manufacture of a furnace plays a significant role when it comes to the price. In most cases, you will find that the more prominent, popular brands will sell their furnaces at a higher price tag.
The assumption is that most of these units are from superior and quality materials and hence the price. Brands like Lennox, Rheem, York, Goodman, and Trane have the best performing furnaces in the market.
Though they fetch a higher price tag, they have diverse differences in quality, warranty, and cost. Highly efficient furnaces lead to an overall saving of energy bills in the chilly months.

2.      The Fuel Source

The price of your furnace will change depending on the fuel source it uses. Gas furnaces cost more than the original purchase, but the operating costs are low. A lot will depend on the type of fuel you readily and easily can access. Electric furnaces need a large enough electric panel to maintain the function of the furnace.

3.      The Size of Your Home

There is no one-size-fits-all when it comes to furnaces. The bigger your home, the bigger your furnace needed to warm the entire property. The size of a furnace depends on its heating capacity measured by British Thermal Units (BTU). If a furnace has high BTUs, then it can output more heat.

4.      The Efficiency of a Furnace

Yes, the furnaces with higher AFUE ratings are more efficient. They convert heat to energy effectively, but they cost more. An efficient furnace also lowers monthly energy bills. Therefore, the initial purchasing price will pay off soon after.

5.      Rebates And Incentives

The government gives out rebates of up to $1,000 to home and property owners through companies such as Fortis. Furnaces with an eligible ENERGY STAR MODEL can qualify you for a rebate. You can contact any furnace specialist for guidance through the multi-faceted rebate process.

6.      Company Overhead

Every business has its own cost of operation, including rent, vehicle purchase, maintenance, products, marketing, etc. These operational expenses change how companies price their units to stay profitable or competitive.

7.      Furnace Installation

In most cases, the cost of installation includes in the overall price of a furnace. The more challenging a furnace is to install, the pricier it will be. Therefore, varying models from the same brand can have variable prices.

A regular installation can cost anywhere between $5,000 to $8,000 in Calgary and the rest of Canada. These figures do not include any rebates or incentives from the government, which can sum up to $1,000. Cheap is expensive, so you will need to pay a little more if you want a quality contractor.

The location of the furnace also determines the cost of installation. A furnace placed in a crawlspace will result in higher installation costs.

8.      Features Affect Cost to Replace Furnace


There are furnaces with unique features, and it affects their price. These features include speed blowers with which the furnace runs at a higher speed. Varying speed blowers save energy as they make the furnace more efficient.

It also lessens wear and tear by allowing the furnace to adjust to the temperature. Other features include a silent combustion technology or a two-stage gas valve.

9.      Location

Your location can very much affect how much you spend on replacing your furnace. In many places in Canada, propane and natural gas furnaces are the furnaces of choice.

Canadians living in rural areas will pay more for furnaces because of the lack of manufactures in the area. That said, servicing the unit becomes challenging for these residents resulting in low demand, so the brands sell the furnaces at a high price to make up for the cost of the operation.

10.      Warranty Of the Furnace

Furnace warranties are the most important factors that influence its price. Warranties are important because they offer protection to your furnace for years if you experience an issue with your unit. Several warranties could affect the cost of replacing the furnace.

  • Manufacturer warranty: Makers of the HVAC equipment offer this warranty, covering any manufacturing errors and correlated repairs. When you register the unit within 60 days of installation, you qualify for special perks. The government regulates these warranties to protect the customer. This warranty is not mandatory.
  • Extended warranties: This is a service contract offered and paid for outside of the manufacturer warranty. You can purchase this warranty while purchasing the furnace or opt to sign up afterward. This warranty prolongs the coverage past the original warranty. It can influence the cost of replacing a furnace when purchasing one.
  • Home warranties: This warranty covers breakdowns that happen from frequent use. You may opt to pay annually or monthly plus a service fee instead of a total cost to replace or repair the furnace.

11.      Types of Furnace

There are many kinds of furnaces, all quite different. Generally, there are three types of furnaces:

  • Two-Stage
  • Two-Stage with an (ECM) and
  • Modulating furnace.

Each type of furnace has a similar BTU but might have different efficiency. The type of furnace can influence the initial cost as well as monthly energy bills.

For instance, a furnace with a highly efficient motor (electronically commutated motor or ECM) can save up to 15% energy use. A modulating furnace has an efficiency rating in the high 90s and will most likely cost more.

The Average Cost of a Furnace

With all the above factors in mind, now we assess the average cost to replace the furnace. A very low-end furnace will fetch a price of between $2500-3500. Generally, these furnaces are of low quality and do not provide adequate efficiency, long lifespan, or furnace warranties.

The initial price of premium furnace models starts from around $4000 – $7000. This price is dependent on the size of your home and the efficiency levels.

High-quality furnace units have significant benefits, including quieter functionality. You can save on the cost of operation each month. When you consider the unit’s lifespan, you see why quality plays a role in the new furnace costYou will end up paying an initial price that is a fraction of the total cost of operation of the unit during its lifespan.

Though the initial new furnace cost can be higher, the low operation cost and low monthly energy bills save you a significant amount of money. The cost savings are substantial during the colder months.

Tips To Consider While Looking to Replace Your Furnace

1.      Consult More

The cost of replacing a furnace tends to change each year or every season, depending on your location. Most companies in Canada will offer you a guaranteed period on the installation quote on your furnace.
The guaranteed period provides you with ample time to consider your choices on varying brands, units and benefits provided. Only view quotes from companies that send their professionals to your property to give an accurate cost estimate. Do not settle for one furnace quote but aim for at least three.

2.      Research On the Products Provided by Each Company

Practice due diligence in researching the products a company sells and ensuring they have equal or substantial quality. Many companies offer substandard products. The rule of thumb is that the quality of the furnace is only as good as the quality of installation and vice versa.

3.      Check Online Reviews


Good products do not always come with excellent service. Having qualified experts to guide you through selecting, purchasing, operating, and repairing your furnace can be reassuring. New furnace cost and installation are essential, but so is excellent customer service after installation.

Before settling on a particular company, ensure you check their reviews online. You want a company that has a 4.5-star rating with at least a few reviews.

4.      Are You Comfortable with Cost to Replace Furnace and Everything Else?

A certain peace of mind comes with being comfortable with the price, process, and customer service.

5.      Be Cautious About “Starting at” Cost to Replace Furnace

Make sure you get a specific quoted price when asking for the new furnace cost. Most of the “starting at cost” are lower than the original final cost. Low prices probably mean low-quality products, low efficiency, and little to no warranties. For this reason, it is vital to acquire a quote that indicates the accurate cost of the new furnace.


In Calgary, the least amount you can pay for a new furnace costs as little as $2500, including installation. However, brands such as Lennox can sell their units for as high as $7000 or $8000. The more affordable brands are Trane, Armstrong Air, and American Standard.

Thoroughly research the furnace brands you wish to purchase. Ensure you do not buy a used unit for the price of a new one. Confirm that they provide you with a warranty or protection plan about the furnace’s conditions for repair or replacement.