The Real Oil Furnace Replacement Cost [BREAKDOWN]

Dominic Mitton
By Dominic  • Reviewed by Ben  • Updated:   October 19, 2023
Affiliate disclosure: When you buy a product via our links, we sometimes earn a referral fee. Learn more

If it’s time to replace your old oil furnace, you’re probably wondering what the actual cost is.

I’m not here to sugarcoat anything, so you will see a real breakdown of price and what factors affect it the most.

Without any further ado, let’s jump straight to it.

How Much Does Oil Furnace Replacement Cost?

Oil furnace replacement costs depend on a lot of different factors.

The average cost of installing a new oil furnace is from $3,000 up to $9,175. This includes the oil furnace unit, installation, and removal of your old furnace.

However, the most important factor here is the efficiency of your furnace.

The efficiency of an oil furnace is measured in AFUE and percentages.

If you have a high-efficiency furnace, which ranges from 90%-97%, then you can expect to spend from $6,000 up to $10,000.

On the other hand, a standard efficiency furnace, which ranges from 80%-89%, has cost from $3,500 up to $7,000.

If you live in a warmer area and don’t have very cold winters, I recommend you go with a standard unit because you don’t have to spend extra money to buy a more efficient furnace.

How Long Does an Oil Furnace Last?

A well-maintained oil furnace should last you up to 20 years.

In most cases, oil furnaces will last up to 15 years and then they will slowly start decreasing the performance.

You can get a more in-depth answer here.

Even if you got your oil furnace a few years ago, it might be time for replacement if you notice that heating bills have been increasing over the last two years.

Also, if you notice your furnace making a rattling noise or that the burner flame is yellow instead of orange – I’d highly recommend installing a new furnace.

Factors That Affect The Price Of A Furnace

Square Footage

The biggest factor that impacts your oil furnace cost is the square footage of your home.

If your home’s square footage is above 2,000 sq. ft., then you need at least 100,000 BTUs which of course, costs more.

BTU (British Thermal Units) is a measurement unit of how much heat an oil furnace can produce – this is highly connected with an efficiency rating.


As with anything else, different brands have different pricing.

For example, the Trane oil furnace and Kerr oil furnace have a $2,000+ difference in pricing.

It’s important to pay attention to which brands your contracts have to offer.

Additional work

This includes ductwork replacement, further inspections, and even thermostat installation.

Let’s say you want to add HEPA air purifiers inside of your home’s system, that would be an extra $300 to the overall installation cost.

The same is true with a programmable thermostat.

As you can see, the pricing might vary depending on how advanced your oil furnace will be.

If your current oil furnace won’t start, you should read this article.

Hey there! I am Benas, the founder and content editor at Home Caprice. Thanks for reading the article. I hope you were able to find what you were looking for. I and my team are here to simplify heating and cooling for everyone. Please have a look at the About page for more details about our website and feel free to check out our editorial process.