If you’re reading this, you’re probably in the market for a new furnace and I know firsthand it can feel like a lot to figure out. In Ontario, we have a variety of furnace options to consider, and prices can vary based on everything from the type of furnace to efficiency levels and installation requirements.
With that said, we’ve found the average cost of a new natural gas furnace in Ontario is between $4,000 and $6,500, including installation.
However, this is a big range, right? And what about people that need or want an electric or oil furnace?
What’s really important to understand is what goes into a new furnace purchase, what you actually need and what’s best for your specific situation. And it’s not as straightforward as listing out a simple table of prices.
But, if you stick around and read through this guide, I’ll walk you through ALL that goes into the cost of a new furnace in Ontario in 2025 including:
- the types of furnaces and their costs
- what AFUE ratings are, what they mean and how it affects pricing
- how much installation costs add to a purchase
- important features that can add to a purchase (but also save money)
- Ontario furnace rebates
- other costs of ownership you need to know
- AND pricing examples
Once you’ve gone through everything, I encourage you to contact us for a FREE QUOTE. You’ll be able to get an accurate estimate of what it will cost before you commit to a purchase.
Furnace Costs in Ontario by Type: Gas, Electric and Oil
When it comes to replacing a furnace, most people already know what type they need—whether it’s gas, electric, or oil-based. But within each type, there’s a range of prices, mostly depending on the brand you choose and whether you go with a standard model or a premium one.
Here’s what you can expect:
A. Gas Furnace Costs
Gas furnaces are the go-to choice for most people in Ontario, and they come with a good range of options for every budget. From what I’ve seen, if you stick with a standard brand, prices are reasonable and you can expect solid efficiency for your investment. These models tend to be straightforward, reliable, and a great option if you’re looking to replace your furnace without any bells and whistles.
For those who want more energy savings and comfort features, premium gas furnaces are definitely a step up. You’ll find models with variable-speed blowers and higher AFUE (Annual Fuel Utilization Efficiency) ratings, which can lead to noticeable savings over time. While they do cost more upfront, premium models often come with better warranties and are quieter and more efficient overall.
If you’re planning to stay in your home long-term, it might be worth the investment in a premium model.
Here’s a quick breakdown of what to expect a furnace to cost before installation:
- Standard Models: Typically range from $2,000 to $3000.
- Premium Models: Offer advanced features and higher efficiency, ranging from $3,500 to $5,000+.
B. Electric Furnace Costs
Electric furnaces are generally less expensive upfront than gas furnaces, which can be appealing if you’re working with a tighter budget. Standard electric models are simple and efficient for smaller spaces, and the installation is usually straightforward. However, one thing to keep in mind is that Ontario’s electricity costs are higher than natural gas, so operating an electric furnace over time might cost more than gas.
For those looking at premium electric furnaces, the main benefits are quieter operation, some added efficiency, and possibly compatibility with smart thermostats or other upgrades.
If you’re already using an electric furnace, upgrading to a premium model might make sense if you’re looking for quieter performance and small energy savings, but for most people, a standard electric model will get the job done without straining the budget.
Here’s a quick breakdown of what to expect a furnace to cost before installation:
- Standard Models: Generally between $1,500 and $2,500.
- Premium Models: With enhanced features, prices typically range between $2500-$3500.
C. Oil Furnace Costs
Oil furnaces tend to be pricier upfront and come with ongoing costs for oil deliveries and regular maintenance. Standard oil furnaces are still available, and if you’re in a rural area, sticking with oil might be the most practical option.
However, many Ontario homeowners are choosing to switch from oil to gas, especially since there are currently rebates available that can significantly reduce the cost of installing a new gas furnace.
Gas is typically more affordable and accessible, and the energy savings add up quickly, which is why switching can be a good long-term investment if you have gas lines available in your area.
Here’s a quick breakdown of what to expect a furnace to cost before installation:
- Standard Models: Range from $2,500 to $4,000.
- Premium Models: Can cost between $4,000 and $5,500.
Efficiency Ratings and How They Affect Cost
Efficiency ratings are a big factor when it comes to furnace costs. When you’re looking for a new furnace, pay close attention to the AFUE rating as it could actually make a difference in your long-term savings.
AFUE stands for “Annual Fuel Utilization Efficiency”, and it tells you how much fuel your furnace actually turns into heat. So, the higher the rating, the more efficient the furnace.
For example, an 80% AFUE furnace converts 80% of the fuel into heat, with the other 20% going out the exhaust. Many standard models have around 80% to 85% AFUE, which is decent, but if you want more efficiency and energy savings, premium models can go as high as 95% to 98%. Those higher-efficiency models cost more upfront, but they can save you on energy bills over time—especially if you plan on staying in your home for many years. And with energy costs creeping up, a higher efficiency model can provide a nice buffer.
In Ontario, there are sometimes rebates for choosing furnaces with higher AFUE ratings, which can help offset the cost difference between a standard and premium model. If you’re on the fence about investing in a high-efficiency furnace, check for any available rebates to see if it makes financial sense for you this year.
Here’s how it typically breaks down when looking at AFUE (prices exclude installation):
Standard Efficiency (80% – 89% AFUE):
- Gas Furnaces: Approximately $2,000 to $3,000.
- Electric Furnaces: Around $1,500 to $2,500.
High Efficiency (90% – 98% AFUE):
- Gas Furnaces: Typically $3,500 to $5,000+.
- Electric Furnaces: Between $2,500 and $3,500.
Furnace Installation Costs in 2025
Beyond the furnace itself, installation costs are another key part of the budget. This is why it’s important to have a clear understanding of them when getting a quote. It can also affect the quality and longevity of your furnace, so it’s doubly important to use a reputable and experienced HVAC company.
What many people don’t realize is that the installation cost depends on your home’s setup and the condition of your existing ductwork.
- Basic Installation: For a straightforward installation, like replacing an old furnace with the same type in the same spot, costs tend to be on the lower end. Installers come in, swap out the units, make sure everything’s connected, and that’s it. For basic installations, costs typically start at $1,000.
- Complex Installations: If your home needs extra work, such as new ductwork or adjustments for better airflow, installation costs can go up. Homes with tight spaces or basements with limited access might also see higher installation fees because it takes more time and effort to get the furnace set up properly. For complex installations, costs can add an additional $1,000-$2,000+.
- Permit and Inspection Costs: In Ontario, you’ll need permits and possibly an inspection to make sure the installation meets safety standards. This can add to the cost, but it’s necessary to make sure everything’s safe and up to code. These range typically between $200-$500.
- Removing the Old Furnace: If you’re replacing the old furnace, you’ll likely pay a bit extra for removal and disposal. Many HVAC companies include this in their quote, but it’s good to double-check so you don’t get surprised with extra fees. Disposal fees can range from $100 to $300.
Having a technician assess your setup beforehand can help you avoid unexpected costs. At MWS HVAC we even offer a free in-home estimate so you know exactly what to expect.
Features That Can Affect the cost of a Furnace in Ontario
Another factor that might surprise you is the range of features available on modern furnaces, and how those can influence the price. Here are a few of the most common features you’ll see, and how they might impact your costs:
- Single-Stage vs. Two-Stage: Single-stage furnaces are the most basic and cost-effective. Two-stage furnaces have two settings, which provide consistent airflow and better temperature control, typically adding $500 to $1,000 to the base price.
- Smart Thermostat Compatibility: Many new furnaces now come with compatibility for smart thermostats, which allow you to control your home’s temperature from your phone. These thermostats can save energy by adjusting temperatures when you’re away. Integration can cost an additional $200 to $500.
- Noise Reduction Features: If you’ve ever had a loud furnace, you’ll understand why noise reduction is appealing. Premium models often have insulated cabinets or variable-speed blowers that make them quieter. This feature won’t necessarily save you money on energy, but it can be worth it if you’re tired of hearing the furnace kick on every time it cycles. This can add $300 to $600.
- Zoning Capabilities: If you have a large or multi-story home, a furnace with zoning capabilities can be life-changing. This allows you to control the temperature in different areas of the house, adding typically $1,000 to $2,500 to the cost of a job.
When I was choosing my own furnace, I found that it helped to make a list of “must-haves” versus “nice-to-haves” in terms of features. Knowing what matters most can keep you within budget while still getting the comfort and efficiency you’re after.
Rebates and Incentives for new furnaces in Ontario
Checking into current rebates and incentives is definitely worth your time. These incentives can make a big difference, especially if you’re considering a premium model with a high AFUE rating.
- Efficiency Rebates: High-efficiency furnaces (usually 95% AFUE or higher) can qualify for government rebates, and these can knock a decent amount off your overall cost. This is especially helpful if you’re looking at a more expensive model.
- Oil-to-Gas Conversion Rebates: There are also potentially incentives for switching from oil to natural gas. If you’re in a rural area or an older home that’s still running on oil, this can be a great time to switch, both for the rebate and the long-term savings on fuel costs.
At MWS HVAC, we will make sure you’re aware of any current incentive programs to help make the cost of a new furnace as affordable as possible.
Total Cost of Ownership and Long-Term Savings
It’s tempting to look only at the sticker price of a new furnace, but the total cost of ownership is what really matters in the long run. This includes everything from maintenance and energy costs to how long the furnace will last.
- Maintenance Costs: Regular maintenance is key to keeping any furnace running efficiently, and some types or brands require more upkeep than others. Standard furnaces are usually straightforward, with fewer components that need checking, while premium models may require a bit more attention, especially if they have advanced features. Annual maintenance plans usually run about $100-$200.
- Energy Costs: Different types of furnaces have different energy costs. Gas tends to be the cheapest to operate in Ontario, while electric furnaces can be pricier over time because of electricity rates. If you’ve chosen a high-efficiency model, though, you’ll likely save on energy costs each month, which can add up over the years. High-efficiency models can reduce monthly bills by 10% to 20%.
- Longevity: Premium furnaces typically come with a longer lifespan due to better materials and warranties, but they do cost more upfront. Standard models, while slightly less durable, still offer great reliability for the cost and are often easier and cheaper to repair. When you factor in the initial price, operating costs, and potential repairs, premium models can sometimes pay for themselves in the long term if you’re planning on staying in your home for a while.
In our experience, focusing on long-term costs rather than just the upfront price will give you a clearer picture of what you’re actually investing in. And at MWS HVAC, we make sure you understand the costs and involved in your investment before you commit to working with us.
Final total for a new furnace in ontario in 2025?
Ok, you’ve made it this far and by now you probably just want to know what this thing will cost you.
Let’s take a look at a few different examples to give you a range of prices across different furnace types and their options.
Next Steps
That’s everything for this year’s New Furnace Cost Ontario Guide. I hope it’s answered most of your questions.
If you need to talk to a professional, experienced HVAC company please either call us at 289-497-8357 or use the form just below to request your free quote!
