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If your furnace is on its last legs, the first thing you want to know is what a replacement actually costs. A new furnace installation in Texas runs $3,500–$8,500 in 2026, and the spread between low and high comes down to fuel type, size, efficiency rating, and brand. Here is the real breakdown - what you'll pay, what you should and shouldn't spend extra on, and the honest tradeoffs between cheap, mid-range, and premium options.
Quick Answer: 2026 Furnace Replacement Cost Ranges
Standard 80% AFUE gas furnace, replacement only: $3,500–$5,500 installed
High-efficiency 95–98% AFUE gas furnace: $5,500–$8,500 installed
Electric furnace: $2,500–$4,500 installed (lower upfront, higher operating cost)
Propane furnace: $4,000–$7,000 installed (similar to gas, but propane fuel is more expensive)
These numbers include the unit, labor, permit, basic venting, and removal of the old furnace. Add-ons (new ductwork, gas line work, electrical upgrades) push higher.
What Determines Your Price
### 1. Fuel Type
Natural gas is the most common in Central Texas where it's available. Lower operating cost than electric, faster recovery on cold mornings.
Electric furnaces are cheaper to buy, more expensive to run. Make sense in well-insulated homes with mild winters or where natural gas isn't piped to the property. Outside city limits in Bastrop County and rural Lee/Milam County, electric is often the only option without bringing in propane.
Propane is common for rural homes without gas service. Same furnace as natural gas with a different orifice. Fuel cost varies wildly - propane prices doubled in some markets in recent years.
Heat pump (technically not a furnace, but worth comparing): $5,000–$10,000 for a heat pump system. Heats AND cools. We have a separate post on whether a heat pump makes sense in Texas.
### 2. Efficiency Rating (AFUE)
AFUE = Annual Fuel Utilization Efficiency. Higher means more of the fuel becomes heat in your home, less goes up the flue.
80% AFUE: The legal minimum. Cheapest unit. Loses 20% of fuel as exhaust heat. Best for mild Texas climates where heating runs maybe 600 hours/year.
90% AFUE: Mid-tier. Captures more heat from combustion. Sealed combustion (uses outdoor air, doesn't rob conditioned air from the house).
95–98% AFUE: Premium. Two-stage condensing units. Pays back over 10–15 years through fuel savings.
Honest take for Central Texas: unless you live in a hill-country home with serious heating loads, the payback on 95% vs. 80% is 12–20 years - longer than the furnace will last. We usually recommend 80% AFUE for Texas homeowners and putting the savings toward AC replacement (which runs far more hours per year here).
### 3. Size (BTU Capacity)
Sized in BTU/hour. Most Texas homes need:
- Under 1,500 sq ft: 40,000–60,000 BTU
- 1,500–2,500 sq ft: 60,000–80,000 BTU
- 2,500–3,500 sq ft: 80,000–100,000 BTU
- 3,500+ sq ft: 100,000–120,000 BTU
These are rough - a proper Manual J load calculation by a tech accounts for insulation, windows, ceiling height, and air leakage. Don't let anyone size by square footage alone. Oversized furnaces short cycle and wear out fast.
### 4. Single-Stage vs. Two-Stage vs. Modulating
Single-stage (cheapest): On or off. Full blast or nothing.
Two-stage: Runs at low (~65%) most of the time, kicks to high on cold nights. More even heat. $400–$800 premium.
Modulating (premium): Continuously adjusts between 35–100% capacity. Most even heating, most efficient. $1,500–$3,000 premium.
For Texas with short heating seasons, two-stage is usually the best value if you want comfort upgrades. Modulating is overkill unless you're in a luxury home.
### 5. Brand
All major brands manufacture similar quality furnaces. The bigger differences are warranty, parts availability, and dealer network.
Premium tier ($500–1,500 more than budget): Carrier, Trane, Lennox. Best parts availability, longest standard warranties (10 years on heat exchanger common).
Mid-tier (best value): Bryant, American Standard, Rheem, Goodman, Amana. Same quality manufacturing as the premium tier (most are owned by the same parent companies). 5–10 year warranties.
Budget tier: Payne, Ducane, Tempstar. Same parent companies. Shorter warranties, fewer features.
Honest take: for most homeowners, mid-tier is the best value. Goodman and Amana (both owned by Daikin) are particularly strong on warranty - Goodman's standard warranty is often 10 years parts AND lifetime heat exchanger when registered.
Hidden Costs That Add to the Quote
New venting: $300–$1,500 if you're going from 80% to 95% AFUE (different vent material required).
Gas line upgrade: $400–$1,500 if your existing line is undersized for the new unit.
Electrical upgrade: $200–$800 if a new dedicated circuit is needed.
Ductwork repair or replacement: $1,500–$5,000 if existing ducts are leaky or undersized. Best done at furnace replacement time, not as a standalone job.
Permits: $50–$300 depending on jurisdiction. Always required. Reputable installers include this.
Old unit removal and disposal: $50–$200. Usually included.
Where People Overpay
Buying premium-tier when mid-tier does the same job. A $1,500 brand upgrade rarely returns its cost.
Modulating furnaces in Texas climate. Comfort marginal, payback 25+ years.
98% AFUE in mild climates. 90–95% is the sweet spot for Texas. The difference between 95% and 98% is not worth $1,000+ for ~600 heating hours/year.
Add-on packages with extras you won't use (humidifiers in Texas, UV lights, premium thermostats bundled with the system).
What to Get in Quotes
Get 3 quotes. Make sure each includes:
- Manufacturer, model, AFUE, BTU rating
- Single-stage / two-stage / modulating
- Warranty (parts, labor, heat exchanger)
- Permits, code-required upgrades, haul-away
- Total price including tax
If a quote is much lower than the others, ask what's NOT included. Common omissions: permit fees, code-required venting, electrical, ductwork transitions.
When to Repair vs. Replace
Replace if:
- Furnace is 15+ years old and needs a major repair
- Heat exchanger is cracked (safety hazard, replacement cost ~70% of new unit)
- Repair cost is more than 50% of replacement cost on a 10+ year old unit
- Energy bills have climbed and the unit is short-cycling
Repair if:
- Under 12 years old and a single component (igniter, blower motor, gas valve)
- Repair cost under 30% of replacement
Texas-Specific Considerations
Short heating season = furnaces last longer in Texas than in northern states. A unit that lasts 15 years in Minnesota might last 22 years here. Don't replace prematurely.
Combo heating + cooling system is the norm. If your AC is also 12+ years old, replacing both at once saves on labor and matches efficiencies for proper system pairing.
Hard water doesn't affect furnaces (it's an air-handling system). It does affect humidifier accessories, but most Texas homes don't need humidifiers - climate is humid enough.
Get a Quote
Same-day furnace quotes across Central Texas - Pflugerville, Bastrop, Taylor, Elgin, Georgetown, Hutto, Manor, Cameron, Rockdale, Brenham, and our full service area. Call (737) 260-7255. Texas license TACLB00027491E. Flat-rate quotes - the price we give in your driveway is the price you pay.