Replacing a furnace is one of the biggest home expenses, and quotes can vary widely from home to home. Furnace replacement cost in Central Indiana depends on the furnace’s size, efficiency rating, and stage type, as well as the condition of the home’s ductwork and venting. Understanding what drives the price can help you compare quotes and choose equipment that fits your home.

Below, we’ll cover typical furnace replacement costs, the equipment and installation factors that affect price, upcoming efficiency requirements, and when it may make sense to compare repair and replacement.

How Much Does a New Furnace Cost?

A gas furnace replacement for a 1,600- to 2,000-square-foot home averages about $7,000 installed, with most projects falling between $3,800 and $10,000, according to Angi. High-efficiency models can reach about $12,000.

These are national figures, so pricing in Central Indiana may land higher or lower. The furnace you choose and the work your home needs will determine where your project falls within that range.

Equipment Factors That Affect Furnace Replacement Cost

The furnace itself makes up a significant share of the total project cost. Size, efficiency, and stage type are three of the biggest equipment factors.

Furnace Size and Heating Load

Furnaces are rated by heating capacity, and higher-capacity equipment generally costs more. Bigger isn’t automatically better, though. An oversized furnace may run in shorter cycles, while an undersized furnace may struggle to maintain the thermostat setting during colder weather.

Base the right furnace size on the home’s heating load rather than square footage alone. A load calculation considers insulation, windows, air leakage, ceiling height, and layout, so two homes with the same square footage may need different furnace capacities.

Efficiency Rating

Furnace efficiency is measured by AFUE, which describes how much of the fuel a furnace uses becomes usable heat in the home. Higher-efficiency condensing furnaces generally cost more upfront and may have different venting and drainage requirements than older equipment.

ENERGY STAR certified gas furnaces sold for the northern U.S. can be up to 18% more efficient than baseline models and may save about $160 per year in energy costs, according to ENERGY STAR. Actual savings depend on the home, fuel prices, thermostat settings, and how the equipment is used.

Stage Type

Single-stage furnaces operate at full output whenever they run and are generally the simplest option. Two-stage furnaces can operate at a lower stage when full heating output isn’t needed, while variable-speed equipment adjusts more gradually.

Both usually cost more upfront than single-stage equipment but may provide steadier temperatures.

Installation Costs to Budget For

The work required to connect the new furnace to the home can also affect the total price. Angi lists common additional costs such as:

• Ductwork repairs or replacement: $1,500 to $7,000, depending on the amount of work needed.
• Permits and inspections: $400 to $1,500.
• New gas line: $250 to $800.
• Old furnace removal: $60 to $500.

Not every replacement will require these costs, especially in homes with usable ductwork, compatible venting, and an existing gas connection.

Switching to a high-efficiency condensing furnace may also require changes to the venting and condensate drainage. Tight attics and crawl spaces can also add labor, and an in-home visit makes these factors easiest to evaluate.

The 2028 Furnace Efficiency Standard

Under a Department of Energy rule finalized in 2023, non-weatherized residential gas furnaces manufactured on or after December 18, 2028, must meet a minimum 95% AFUE rating. The rule remains in effect, but it’s back in federal court, and the DOE is considering a delay, according to Contracting Business.

That doesn’t mean every homeowner replacing a furnace before then needs to choose a 95% AFUE model. If you’re comparing equipment now, ask how each efficiency level affects both upfront and long-term operating costs.

Get an Accurate Furnace Replacement Quote

Online cost ranges help with planning, but the actual price depends on your home. Dugan Air Heating & Cooling’s NATE-certified technicians serve Franklin, Columbus, and communities throughout Central Indiana, evaluate the heating load, ductwork, and venting, recommend a furnace, and provide upfront pricing. Schedule a furnace replacement estimate to get pricing based on your home.

Frequently Asked Questions About Furnace Replacement

How much should it cost to replace a furnace?

A gas furnace replacement averages about $7,000 nationally, with many projects falling between $3,800 and $10,000. The final price depends on the furnace’s capacity, efficiency, and stage type, along with any venting, ductwork, gas line, electrical, or other installation work the home needs. An in-home estimate provides the most accurate price for your project.

How much is a furnace for a 1,500-square-foot house?

There’s no single furnace price for a 1,500-square-foot home because square footage alone doesn’t determine the heating load. Insulation, windows, air leakage, ceiling height, layout, and other factors can all affect the furnace capacity the home needs. Equipment efficiency and stage type also affect the final price.

What is the most expensive part to replace in a furnace?

The heat exchanger can be one of the more expensive furnace components to replace because of the part itself and the labor required to access and replace it. A confirmed heat exchanger problem can also create a safety concern, so the repair should be evaluated by a qualified technician. On some furnaces, the cost and condition of the equipment may make it worth comparing repair with replacement.