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How Much Does an Oil Furnace Cost?

Average National Cost
? Cost data include the unit, labor, and demolition, if applicable. All cost data in this article were gathered from RSMeans construction materials and labor database and bids from top contractors.
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$6,425 - $9,175

Find costs near you.

Updated On

February 14, 2024

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  • Expect a new oil furnace to cost $6,425 and $9,175 to install.
  • The type of oil furnace you choose, your area, and the installation company will also affect your final cost.
  • We don’t recommend doing oil furnace installation yourself because this installation is complex.

Oil furnaces are safer than natural gas furnaces because they do not release dangerous carbon monoxide and cannot catch fire from a gas leak. Oil furnaces also operate more quietly, creating a more relaxing living environment. While these furnaces have some advantages, they can be expensive to replace or install.

We aim to provide homeowners like you with the most accurate oil furnace cost information possible, so we rely on actual construction material databases and get our information straight from the manufacturer. That way, you’ll know what to expect even before you contact one of the best furnace brands for a quote.

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trane hvac unit outside
HVAC Installation
In general, you can expect to pay between $5,540 to $10,980 per HVAC unit, installation costs, and removal of your old unit.
trane furnace cost
Furnace Replacement
In general, you can expect to pay between $4,000 and $7,000, including installation, old furnace removal, and labor.
trane heat pump cost
Heat Pump Installation
In general, you can expect to pay between $3,000 and $35,000, but most homeowners spend between $5,800 and $7,500.

How Much Does It Cost To Install an Oil Furnace?

Oil furnaces cost between $6,425 and $9,175 to install. This national average includes the oil furnace, installation fees, and old furnace removal. If you install a new thermostat, replace ductwork, or install home air quality systems, your installation costs will be higher.

Low CostAverage CostHigh Cost
Cost data include the unit, labor, and demolition, if applicable. All cost data in this article were gathered from RSMeans construction materials and labor database and bids from top contractors.

How Do Costs Differ By Oil Furnace Type?

One of the most important cost factors is the efficiency of the furnace — the more efficient your furnace is, the more expensive it’ll be. However, the extra cost of a more efficient furnace will result in greater energy savings in the long run. So if you plan to live in your home long term, it’s worth it to pay more now to save later.

The efficiency of an oil furnace is measured by its annual fuel utilization efficiency, commonly known as the AFUE rating. This percentage tells you how efficient your oil furnace will be over time. New furnaces have AFUE ratings of 80% or more — the higher the percentage, the more efficient your furnace will be.

Standard furnaces have AFUE ratings between 80% and 89%, but high-efficiency furnaces have AFUE ratings of at least 90% or more. The most energy-efficient oil furnaces reach 97% efficiency. On average, the most efficient oil furnaces cost between $6,000 and $9,175, while you’ll pay between $3,500 and $7,500 for a standard efficiency furnace.

Oil Furnace TypeLow CostHigh Cost
Standard Efficiency (80% – 89%)$3,500$7,500
High-Efficiency (90% – 97%)$6,000$9,175

Standard Oil Furnace

If your current furnace broke down unexpectedly and you need a quick, affordable replacement, then a standard oil furnace is the way to go. Furnaces with an 80% to 89% AFUE rating still have good energy efficiency and will probably save you money on your energy bills compared to your old furnace. Standard efficiency oil furnaces cost between $3,500 and $7,500.

Standard oil furnaces are ideal if you live in a warmer state and don’t have cold winters. Since you only use your heating system a few months out of the year, you don’t have to spend the extra money for the most efficient furnace. But if you live in colder regions and use your furnace half the year, this type may not be right for you.

High-Efficiency Oil Furnace

High-efficiency oil furnaces cost, on average, between $6,000 and $9,175. These furnaces may cost more up-front, but you can save more than $1,275 in lifetime energy costs if you buy a more efficient furnace, according to the Department of Energy. If you live in a state that gets heavy snow and freezing temperatures, you’ll especially want to invest in an efficient furnace — you’ll save money every month you use it.

If you’re worried about the total cost of this more expensive furnace, ask about local rebates and tax credits. For oil furnaces, you can get a $150 IRS HVAC tax credit and up to $600 in rebates. After these savings, your energy-efficient furnace may not be much more than a standard efficiency furnace.

How Does Home Size Affect Oil Furnace Pricing?

The bigger your home, the larger your furnace will need to be. Larger homes require more forced air to heat each space and maintain a consistent internal temperature. For example, if you live in a 1,000-square-foot home, your furnace may cost between $6,425 and $7,420. If you live in a 3,000-square-foot home, your oil furnace might cost between $7,085 and $9,175.

BTUHome Square FootageLow Oil Furnace CostHigh Oil Furnace Cost
55,000 BTU1,000 sq. ft.$6,425$7,420
80,000 BTU1,500 sq. ft.$6,680$7,650
100,000 BTU2,000 sq. ft.$6,700$7,685
130,000 BTU2,500 sq. ft.$6,610$8,075
150,000 BTU3,000 sq. ft.$7,085$9,175

Which Factors Impact Oil Furnace Cost Estimates?

The square footage of your home is just one factor of many that affect your oil furnace replacement costs, and you can expect several other factors to affect it, namely:

  • British thermal units (BTU)
  • Oil furnace brand
  • Old furnace removal
  • Additional installation costs

British Thermal Units (BTU)

BTULow Oil Furnace CostHigh Oil Furnace Cost
55,000 BTU$6,425$7,420
80,000 BTU$6,680$7,650
100,000 BTU$6,700$7,685
130,000 BTU$6,610$8,075
150,000 BTU$7,085$9,175

The British thermal unit (BTU) is the most common unit of measurement for HVAC equipment and refers to how much heat your oil furnace can produce. For furnaces, having a higher BTU means the unit has more heat capacity. You’ll pay $6,425 for a smaller 55,000 BTU unit, but you could pay $9,175 or more for an oil-heating furnace with 150,000 BTUs.

The bigger your home, the more BTUs you’ll need to heat it properly. You’ll also need to consider the height of your ceilings, the quality of home insulation, the size of your windows, and — most importantly — your geographic location.

Where you live plays a major role in furnace size because your furnace needs to work significantly harder to keep your home warm when the temperatures reach below freezing. If you live in northern states, you can expect to pay more for a larger oil furnace. But if you live in a warmer region, you can get away with fewer BTUs.

To estimate how many BTUs you’ll need, check out the average number of BTUs needed per square foot by region:

  • 20 BTU to 30 BTU: Hot climates (Florida, Texas, and other Gulf Coast states)
  • 25 BTU to 35 BTU: Warm climates (California and Southeast states)
  • 30 BTU to 45 BTU: Moderate climates (Lower Midwest and Mid-Atlantic states)
  • 45 BTU to 55 BTU: Cold climates (Mountain regions)
  • 50 BTU to 60 BTU: Freezing climates (Upper Midwest and Northeast)

Oil Furnace Brand

Furnace BrandAverage Unit Cost
Armstrong$2,500 – $7,300
Bryant$3,000 – $7,000
Carrier$3,000 – $6,000
Kerr$4,500 – $8,000
Lennox$3,000 – $6,500
Rheem$2,800 – $7,200
Thermo Pride$3,500 – $6,500
Trane$2,500 – $6,000

The brand of furnace you choose will also affect your total cost. As you can see from the table above, the cost of different brands can differ by $1,000 or more. So pay attention to which brands your HVAC contractor offers.

Every heating, ventilation, and air conditioning contractor works with different brands, so it’s always a good idea to get several quotes before you settle on one. For example, you may get a quote for a Trane oil furnace for $6,000 but another for a Bryant furnace for $7,000. In this scenario, if you choose the Trane furnace over the Bryant furnace, you will save $1,000. Some furnaces, like Lennox furnaces, ask more price-wise for higher quality.

Old Furnace Removal

Removal TypeAverage Cost
Furnace under 120 MBH$250 – $645
Furnace over 120 MBH$335 – $645

When it’s time to replace your furnace, and you need to remove and dispose of your old unit, that fee is usually lumped into labor costs — but some HVAC contractors will list it separately. Most residential furnaces are under 120 MBH (or 120,000 BTUs), so you can expect to pay between $250 and $645 to dismantle and remove your old furnace. But if you have a larger home and a larger furnace, you’ll likely pay $335 to $645 to remove it.

Want to know more about what to expect during your HVAC installation? Check out the podcast below.

Additional Installation Costs

Any time you replace an older system or appliance in your home, you may find problems that need to be fixed or updates that need to be made. Additionally, old furnace replacement is the best time to replace air filters, thermostats, and other outdated home systems.

  • Ductwork replacement: Ductwork replacement costs between $15 and $40 per linear foot. The total amount you’ll pay for new ductwork depends on how much you need to install, but you can expect the total to be between $2,500 to $6,600.
  • HEPA air purifier: If you want to improve your home’s air quality, you may install an in-home air filtration system. Some of these systems cost as little as $300, but most quality HEPA air purification systems cost between $2,000 and $4,000 for the unit and installation.
  • Humidifier: Since you’ve already booked an HVAC crew, it’s a good time to install a humidifier in your home, too. These systems add water to the warm air as it leaves the furnace, which combats dry air and makes your home more comfortable in the winter. A humidifier typically costs between $800 and $1,100 for the unit, plumbing, and installation.
  • Permits and inspections: In many states, you must pass an inspection and get a permit to install new HVAC systems. These permits and inspections cost between $50 and $300 on average.
  • Thermostat installation: If you’re upgrading your old furnace, you may also want to give your thermostat a makeover. You can pay as little as $50 for a new programmable thermostat or more than $300.

Find HVAC Cost Estimates In Your State

Professional vs. DIY Oil Furnace Installation

We can’t deny that oil furnace installation is expensive, but it’s well worth the money in this case. Your furnace is an essential part of your home, and if it’s not hooked up correctly, it can compromise your home’s safety — not to mention your energy costs could skyrocket. That said, we don’t recommend DIY oil furnace installation. It’s better to leave this installation to the HVAC pros.

Doing Oil Furnace Installation Yourself

We don’t recommend doing oil furnace installation yourself because this installation is complex. Not only does it require knowledge of HVAC systems, but you also need to know how to work with oil tanks, heat exchangers, and electrical systems.

Today’s Homeowner Tips
Hire a professional HVAC company to install your new home heating system to ensure your oil furnace is operating at its highest capacity.

There are several benefits of trusting professionals with your HVAC project, notably:

  • Your furnace will be installed correctly.
  • Your furnace will operate at its highest efficiency and capacity.
  • You’ll have an HVAC company to work with for future projects.
  • You’ll have an HVAC company that can do repairs and annual HVAC maintenance.
  • You’ll get a workmanship warranty to cover any problems with furnace installation.
  • You’ll qualify for everything covered under your manufacturer’s warranty.

Hiring a Professional for Oil Furnace Installation

It takes mere seconds to be connected to top-rated HVAC companies in your area. All you need to do is click the button below and our Find a Pro tool will match you with the best contractors near you. Follow these simple steps to get started:

  1. Find local experts near you: Use the button below to connect with one of your area’s best HVAC pros.
  2. Get a quote from a few options: Gather at least two quotes from two providers to compare costs and brand options.
  3. Consult them about their recommendations: Ask the HVAC technician which oil furnace they recommend for your home so you can get options for efficiency, size, and brand.
  4. Choose a quote: Review the brands, efficiency options, and price ranges and choose the quote that best fits your needs and budget.
  5. Set up an appointment for oil furnace installation: Work with your HVAC contractor to set up the best date and time to replace your oil-burning furnace.

So, Is an Oil Furnace Worth the Cost?

Oil furnaces may not be the most common type installed in residential homes, but they are a great option if you don’t want to worry about carbon monoxide. Quieter than gas furnaces, an oil furnace costs between $6,425 and $9,175 to install. If you live in warmer states and don’t have freezing winters, you can get away with a smaller, cheaper furnace with a lower efficiency rating. But if you live in a colder state, you will pay more for your oil furnace replacement.

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Now that you know how much an oil furnace costs, check out our most frequently asked questions about installation.

FAQs About Oil Furnace Cost

How Long Does a Home Oil Furnace Last?

Oil furnaces have an average lifespan of 15 to 20 years. To get the most out of your oil furnace, you should schedule regular HVAC maintenance and yearly tune-ups by your local HVAC company.

How Much Is a New Oil Furnace for a 2,000-Square-foot Home?

A new oil furnace for a 2,000-square-foot home costs between $6,700 and $7,685. However, this cost depends on the brand of furnace you choose, your location, and furnace efficiency.

If you live in a warm climate and choose a lower efficiency furnace, for example, you’ll pay less than if you need a larger, more efficient furnace to keep up with the freezing temperatures of the north.

Are Oil Furnaces Being Phased Out?

In the United States and other countries, several initiatives aim to phase out heating systems that rely on fossil fuels, including oil and natural gas furnaces. The trend is toward electric furnaces because these furnaces do not lose energy during conversion. However, this initiative applies primarily to new construction, so you do not have to completely replace your heating system yet if your oil furnace breaks down.

Are Oil Furnaces Safe?

Oil furnaces are perfectly safe to install. Unlike propane furnaces, oil furnaces do not use natural gas as their fuel source. This means you will not need to worry about carbon monoxide, fires, and explosions.

How Much Does a New Furnace Save On Your Heating Bill?

According to the Department of Energy, an oil furnace with 95% AFUE will save you more than $1,275 and a furnace with 99% AFUE will save you more than $1,550 per year. For a furnace with an 80% AFUE rating, your lifetime energy cost is $8,075, while that cost would be $6,525 for a 99% AFUE furnace.

Editorial Contributors
avatar for Alora Bopray

Alora Bopray

Staff Writer

Alora Bopray is a digital content producer for the home warranty, HVAC, and plumbing categories at Today's Homeowner. She earned her bachelor's degree in psychology from the University of St. Scholastica and her master's degree from the University of Denver. Before becoming a writer for Today's Homeowner, Alora wrote as a freelance writer for dozens of home improvement clients and informed homeowners about the solar industry as a writer for EcoWatch. When she's not writing, Alora can be found planning her next DIY home improvement project or plotting her next novel.

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Roxanne Downer


Roxanne Downer is a commerce editor at Today’s Homeowner, where she tackles everything from foundation repair to solar panel installation. She brings more than 15 years of writing and editing experience to bear in her meticulous approach to ensuring accurate, up-to-date, and engaging content. She’s previously edited for outlets including MSN, Architectural Digest, and Better Homes & Gardens. An alumna of the University of Pennsylvania, Roxanne is now an Oklahoma homeowner, DIY enthusiast, and the proud parent of a playful pug.

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