Replacing an oil furnace usually costs about $4,000 to $10,000 installed, with a national average near $4,900, according to Fixr's 2026 estimate. A standard 80 to 87 percent unit runs about $3,500 to $7,500, and a high-efficiency 90 percent unit about $6,000 to $10,000.
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.
Most homeowners pay $4,000 to $10,000 to install a new oil furnace, with a national average of about $4,900, including materials and labor (Fixr, updated January 2026). Ask each quote whether removal of your old furnace is included.
However, the most important factor here is the efficiency of your furnace.
The efficiency of an oil furnace is measured in AFUE and percentages.
A high-efficiency oil furnace (90% AFUE or higher) typically costs $6,000 to $10,000. For reference, an ENERGY STAR certified oil furnace must be rated at 87% AFUE or greater.
A standard-efficiency furnace (80% to 87% AFUE) typically costs $3,500 to $7,500.
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.
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How Long Does an Oil Furnace Last?
Fixr puts the average lifespan of an oil furnace at 20 to 25 years, and yearly cleaning and tune-ups help.
Some oil furnaces give out at around 15 years and some run for up to 30, so age is only one reason to replace one.
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 your furnace rattles or the flame looks smoky or sooty, call a technician. These can be fixable problems, so decide on a replacement after an inspection.
Gas, electric, heat pump, propane, oil and kerosene ranked by cost per million BTU at your state's prices.
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.
A larger home generally needs a larger furnace, but square footage alone does not set the size. Ask the installer for a heat-load calculation for your home, because a furnace that is too big or too small costs more to run.
BTU (British Thermal Units) measures how much heat an oil furnace can produce. It is a size rating, not an efficiency rating; efficiency is the AFUE.
Brand
As with anything else, different brands have different pricing.
Brand matters. Fixr lists Adams and Kerr as high-end brands that push the cost above the national average, and American Standard, Blueridge and Carrier as budget-friendly ones.
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 add to the overall installation cost.
The same is true of a new 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.
Content writer from Croatia. Dominic studies Information Science at the University of Sarajevo, which helps him research and organize his work.
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