A replacement gas furnace runs $4,000 to $9,500 installed, and a typical 80,000 BTU, 95% AFUE unit in a 2,000 sq ft home lands around $5,500 to $7,000. The spread comes from efficiency tier, venting changes, and how easy the unit is to access. Anyone quoting under $3,500 installed is either selling an 80% builder-grade unit with no frills or leaving things out of the number.
The efficiency question is where most homeowners lose money in one direction or the other. Paying $1,500 extra for 95% AFUE in Texas is usually a waste. Paying it in Minnesota is often the best return in the whole project. The math below makes that concrete.
What You’re Paying For
| Cost component | Typical range | Notes |
|---|---|---|
| Furnace (80% AFUE, single-stage) | $1,800 - $3,000 | The budget option where code allows it |
| Furnace (95%+ AFUE, two-stage) | $2,800 - $4,500 | The mainstream choice in cold climates |
| Furnace (modulating, premium) | $4,000 - $6,500 | Quieter, tighter temperature control |
| Labor and removal of old unit | $1,200 - $2,500 | Attic and crawlspace installs cost more |
| PVC exhaust and intake venting | $300 - $900 | Required for 90%+ units, sometimes rerouted |
| Gas line, electrical, condensate pump | $200 - $700 | Condensate work is new for many homes |
| Permit and inspection | $150 - $400 | Usually required for gas appliance swaps |
One line in that table deserves attention: condensate. A 95% furnace extracts so much heat from combustion that its exhaust turns to water, which means a drain line and sometimes a small pump. Homes that have only ever had 80% units often need new plumbing work to handle it. That’s a real cost, usually $100 to $300 extra, and it’s a line item a lowball quote tends to forget.
The 80% vs. 95% AFUE Payback Math
Run the numbers for a 2,000 sq ft house in Chicago burning about 900 therms of gas a winter. An 80% furnace turns those therms into 720 therms’ worth of heat. A 95% furnace delivers 855. The gap is roughly 135 therms, which at about $1.20 per therm is around $160 a winter. If the 95% unit costs $1,400 more installed, the payback is close to nine years on a twenty-year unit. Reasonable.
Now run the same house in Dallas, where heating might be 350 therms a season. The 95% upgrade saves about 52 therms, call it $63 a year at $1.20 per therm, so a $1,400 premium pays back in twenty-two years. The furnace won’t live that long. In warm climates, take the 80% unit and pocket the difference, if your state still permits it; a few states with newer energy codes now restrict or discourage 80% installs, which your contractor should know.
Two things can change this math. First, venting: if your home has no easy way to run PVC exhaust out a side wall, 95% gets more expensive. Second, fuel prices: at $2+ per therm, cold-climate payback shortens to five or six years, and the premium is a lock.
Single-Stage, Two-Stage, or Modulating
These describe how the burner throttles. A single-stage furnace is a light switch: fully on or fully off, which means the house drifts a couple of degrees between cycles. A two-stage furnace has a low gear, burning at roughly 60% to 70% on most days, so it runs longer, quieter cycles and holds temperature steadier. Modulating units dial output continuously, anywhere from about 40% to 100%, and pair with variable-speed blowers.
In plain terms: two-stage is the sweet spot for most homes, adding $400 to $900 over single-stage. Modulating adds $1,000 to $2,500 more and makes sense mainly in very cold climates, big homes with temperature swings between floors, or houses where the furnace noise is right under the living room. The comfort difference from two-stage is real. The difference from two-stage to modulating is realer on paper than in most living rooms.
Three Real-World Quotes
Ranch in Ohio, 2,000 sq ft, 70,000 BTU. 95% AFUE two-stage unit at $3,200, side-wall PVC venting using an existing penetration $350, labor $1,400, condensate drain $150, permit $200. Total: $5,300.
Two-story in Minnesota, 2,400 sq ft, 100,000 BTU. 96% modulating unit at $4,800, new vent run through the rim joist $500, labor $1,700, humidifier tie-in $250, permit $250. Total: $7,500. Long heating season justified the modulating spend here.
Small house in Georgia, 1,200 sq ft, 45,000 BTU. 80% single-stage at $1,900, labor $1,200, minor flue work $250, permit $150. Total: $3,500. Short heating season, so efficiency spend would have been money burned.
How to Pay Less
Get three quotes in the same week and make them itemize. Furnace pricing varies 20% or more between shops for identical equipment, largely because of overhead and scheduling pressure. Shoulder-season installs, September into early October or late March, tend to price better than the first cold snap.
Ask about distributor brands alongside the advertised names. Same factories, different badges, sometimes several hundred dollars cheaper with a similar parts warranty. And if your air conditioner’s coil sits in the same plenum, price the furnace-and-AC together; combining jobs saves a second trip charge and some duplicated labor, often $500 to $1,000 versus separate projects.
Don’t count on federal help: the tax credit for efficient gas furnaces expired December 31, 2025. Utility rebates still exist in many states and can knock $100 to $500 off, so check dsire.org and your gas utility before you sign. Anyone quoting a “30% federal credit” in 2026 is reading a 2024 script.
Mistakes That Cost Homeowners Money
- Sizing from the old furnace’s label. Insulation, windows, and additions change the load. Oversized furnaces short-cycle, wear out faster, and leave cold spots. Ask for a Manual J calculation.
- Ignoring the venting plan. A 95% furnace needs PVC to a side wall or roof. If a quote swaps 80% for 95% without explaining new vent runs, or vice versa, ask what’s happening.
- Forgetting the AC coil. If the evaporator coil lives in the furnace plenum and it’s 15 years old, replacing the furnace means disturbing it. Matched pairs install cleaner and warranty cleaner.
- Skipping the permit. Gas work without a permit is a resale problem and an insurance problem. A licensed contractor won’t offer to skip it.
- Chasing the cheapest bid. The difference between a careful install and a rushed one shows up as a cracked heat exchanger in year eight. We cover the tells in contractor quote red flags.
And before you commit to gas at all, it’s worth pricing the alternative. A cold-climate heat pump replaces both the furnace and the AC, and in moderate climates it competes on running cost. We compare them honestly in heat pump vs. gas furnace, and the heat pump payback calculator lets you run your own gas-versus-electric numbers.
Bottom Line
Expect $4,000 to $9,500, with most homeowners landing between $5,000 and $7,000 for a two-stage 95% unit. Spend on efficiency only where your heating season justifies it, and get the load calculation plus the venting and condensate details in writing. If the furnace and AC are both past 15, price the combined job now.
FAQ
How long does a gas furnace last?
Fifteen to twenty years is typical, with well-maintained units sometimes reaching twenty-five. Heat exchanger cracks are the usual end, and they’re not repairable. If your furnace is past fifteen and facing a four-figure repair, replacement usually wins the math.
Can I replace my own furnace?
Legally, in most jurisdictions, no. Gas connections, venting, and condensate work need a licensed contractor and a permit in most places. Beyond the legal issue, a botched vent or gas seal is a carbon monoxide and fire risk, which is why insurers care.
What size furnace do I need for a 2,000 sq ft house?
Somewhere between 60,000 and 90,000 BTU depending on climate and insulation, which works out to roughly 30 to 45 BTU per square foot in moderate climates and up to 50 to 60 in very cold ones. A Manual J load calculation settles it properly.
Is a two-stage furnace worth the extra money?
For most homes, yes. The $400 to $900 premium buys quieter operation, more even temperatures, and slightly better efficiency from longer low-fire cycles. It pays for itself in comfort even where the energy savings are modest.