How Much Does Furnace Replacement Cost in Toronto? (2025 Guide)

Planning for a furnace replacement in Toronto? You're probably wondering about the cost. It's one of the first questions homeowners ask—and one of the most difficult to answer with a single number. The reality is that furnace replacement costs vary significantly based on your home, the equipment you choose, and the complexity of installation.

This comprehensive guide breaks down furnace replacement costs for Toronto and GTA homes in 2025, explains what factors affect pricing, and helps you determine whether replacement or repair makes more financial sense for your situation.

Average Furnace Replacement Cost in Toronto (2025)

Let's start with the numbers Toronto homeowners can expect:

Basic Installation: $3,500 - $4,500
Mid-Range Installation: $4,500 - $6,500
High-Efficiency Installation: $6,000 - $8,500
Premium/Complex Installation: $8,000 - $12,000+

These ranges include both equipment and professional installation. The wide variation exists because every home and situation is different. Let's break down what drives these costs.

Factors That Affect Furnace Replacement Cost

1. Furnace Type and Efficiency Rating

The single biggest factor in furnace cost is the equipment itself. Furnaces are rated by AFUE (Annual Fuel Utilization Efficiency)—the percentage of fuel converted to heat.

Standard Efficiency (80% AFUE): $2,000 - $3,000
These basic models work well but waste about 20% of fuel. They're being phased out in Canada due to efficiency regulations.

Mid-Efficiency (90-95% AFUE): $2,500 - $4,000
These are the most common in Toronto homes. They balance cost with performance and meet current efficiency standards.

High-Efficiency (96-98% AFUE): $3,500 - $6,000
Top-tier models with two-stage or modulating burners. They cost more upfront but save significantly on energy bills over time.

2. Home Size and Heating Capacity

Toronto homes vary widely in size, and furnace capacity must match your square footage. Capacity is measured in BTUs (British Thermal Units).

Small homes/condos (1,000-1,500 sq ft): 40,000-60,000 BTU
Average Toronto homes (1,500-2,500 sq ft): 60,000-100,000 BTU
Large homes (2,500-4,000 sq ft): 100,000-140,000 BTU
Very large homes (4,000+ sq ft): 140,000+ BTU

Larger capacity units cost more, but proper sizing is crucial. An oversized furnace short cycles and wastes energy. An undersized one can't keep up with Toronto's cold winters.

3. Installation Complexity

Installation costs vary based on several factors:

• Straightforward replacement: $1,000 - $1,500
  Swapping a similar furnace into the same location with existing ductwork
• Standard installation: $1,500 - $2,500
  May require minor ductwork modifications or electrical updates
• Complex installation: $2,500 - $4,000+
  Involves ductwork redesign, electrical panel upgrades, or challenging access

Older Toronto homes often require additional work:

• Upgrading electrical service (older homes may have inadequate amperage)
• Modifying or replacing ductwork
• Adding or upgrading venting systems
• Relocating the furnace to a different area
• Installing new thermostat and controls

4. Brand and Features

Like most products, furnace brands vary in price and quality. Common brands in Toronto include:

Budget-Friendly: Goodman, Amana, Payne ($2,000-$3,500)
Mid-Range: Carrier, Bryant, American Standard ($3,000-$5,000)
Premium: Lennox, Trane, Rheem ($4,000-$7,000)

Features that increase cost include:

• Variable-speed blowers (quieter, more efficient)
• Two-stage or modulating burners (better comfort, efficiency)
• Advanced thermostat compatibility (smart home integration)
• Superior sound insulation
• Extended warranties

5. Additional Components

A complete installation often includes items beyond the furnace itself:

• Thermostat: $150 - $500 (smart thermostats cost more but save energy)
• Humidifier: $300 - $800 (highly recommended for Toronto's dry winters)
• Air purifier/filtration: $500 - $1,500
• AC coil replacement: $800 - $1,500 (if you have central air)
• Ductwork cleaning: $300 - $600
• Gas line work: $200 - $800

When to Repair vs. Replace Your Furnace

Not every furnace problem means replacement. Here's how to decide:

Repair If:

• Your furnace is less than 12 years old
• The repair cost is under $1,000
• This is your first major repair
• Your energy bills are still reasonable
• The system keeps your home comfortable

Replace If:

• Your furnace is 15-20+ years old
• The repair costs more than 50% of replacement
• You've had multiple repairs in the past 2-3 years
• Energy bills have been steadily climbing
• Some rooms never heat properly
• The furnace short cycles or runs constantly
• You're facing a cracked heat exchanger (unsafe to repair)

The 50% Rule: If your furnace is over 15 years old and the repair costs more than 50% of a new furnace, replacement usually makes more financial sense.

Long-Term Savings from High-Efficiency Furnaces

Higher upfront costs can pay off through energy savings. Here's what Toronto homeowners can expect:

Average Toronto Home Heating Costs (1,800 sq ft):

80% AFUE Furnace: $1,800 - $2,400 per winter
90% AFUE Furnace: $1,600 - $2,100 per winter
96% AFUE Furnace: $1,500 - $1,900 per winter

Example: Upgrade from 80% to 96% AFUE

Additional cost: ~$2,000
Annual savings: ~$400
Payback period: ~5 years
15-year savings: ~$6,000

Plus, high-efficiency furnaces often include better comfort features like variable-speed blowers and modulating burners, providing more consistent temperatures and quieter operation.

Government Rebates and Incentives (2025)

Canadian homeowners can access several programs to offset furnace replacement costs:

Canada Greener Homes Grant

Rebates up to $5,000 for energy-efficient home upgrades, including high-efficiency furnaces. Requires before-and-after energy assessments.

Ontario Energy Incentives

Various utility companies and municipalities offer rebates for high-efficiency heating equipment. Check with your local utility provider.

Home Efficiency Rebate (HER+)

Rebates for switching to high-efficiency equipment in certain areas of Ontario.

Important: Rebate programs change frequently. Always verify current availability and requirements before purchasing.

Financing Options for Furnace Replacement

Many Toronto HVAC companies offer financing to make furnace replacement more affordable:

• Manufacturer financing: Often 0% interest for 12-24 months
• HVAC company financing: Various terms and rates
• Home equity line of credit: Typically lower interest rates
• Energy efficiency loans: Some banks offer favourable rates for energy upgrades

With financing, a $5,000 furnace might cost only $150-$200 per month over 24-36 months—often less than the energy savings from a new high-efficiency unit.

Hidden Costs to Watch For

Beware of these potential additional expenses:

• Permits: $50 - $150 (required in Toronto for furnace installation)
• Asbestos abatement: $1,000 - $3,000+ (in older homes with asbestos-wrapped ducts)
• Electrical panel upgrade: $1,500 - $3,000 (if current panel can't handle new furnace)
• Ductwork replacement: $2,000 - $6,000 (if existing ducts are in poor condition)
• Emergency service fees: $200 - $500 (avoid by planning ahead)

A reputable contractor will assess your home and provide a comprehensive quote that includes these items upfront.

How to Get the Best Value on Furnace Replacement

Follow these tips to ensure you're getting quality equipment and service at a fair price:

1. Get Multiple Quotes (But Don't Just Pick the Cheapest)

Aim for 3-4 quotes from licensed, insured HVAC contractors. Compare not just price, but:

• Equipment brands and efficiency ratings
• Warranty coverage
• What's included in the installation
• Company reputation and reviews
• After-installation support

2. Don't Oversize Your Furnace

Bigger isn't better. An oversized furnace costs more, wastes energy, and provides poor comfort. Ensure your contractor performs a proper heat load calculation for your specific home.

3. Consider Total Cost of Ownership

Look beyond the purchase price. A $6,000 high-efficiency furnace that saves $400 annually is a better value than a $4,000 basic model over the furnace's 15-20 year lifespan.

4. Schedule in the Off-Season

Furnace prices and availability are best in summer and early fall. By October, demand increases and some contractors charge premium rates. Winter emergency replacements are the most expensive.

5. Verify Licenses and Insurance

Ensure your contractor is licensed by the Technical Standards and Safety Authority (TSSA) in Ontario and carries proper insurance. This protects you if something goes wrong.

What's Included in Professional Installation?

A complete furnace installation should include:

• Removal and disposal of old furnace
• New furnace equipment delivery and installation
• Gas line connections and testing
• Electrical connections
• Venting installation or modification
• Thermostat installation and programming
• System testing and calibration
• Customer demonstration and instruction
• Permits and inspections
• Cleanup of work area
• Warranty registration

Quality contractors stand behind their work with installation warranties in addition to manufacturer equipment warranties.

Timeline for Furnace Replacement

How long does furnace replacement take?

From decision to installation: 1-3 weeks (longer in winter)
Actual installation: 4-8 hours for straightforward replacements
Complex installations: 1-2 days

During peak season (November-January), scheduling can take longer. Plan ahead to avoid being without heat while waiting for installation.

Making the Right Choice for Your Toronto Home

Furnace replacement is a significant investment, but Toronto's climate demands a reliable heating system. While the upfront cost might seem daunting, consider:

• A new furnace will last 15-20 years
• Energy savings add up to thousands of dollars
• You'll enjoy better comfort and reliability
• You're protecting your family's safety
• Your home's value increases

Don't let cost prevent you from replacing a failing furnace. With financing options and government rebates, a new high-efficiency furnace is more affordable than you might think.

The key is working with a reputable HVAC contractor who will provide honest advice, transparent pricing, and quality installation. Take time to research your options, get multiple quotes, and choose equipment that fits both your budget and your home's needs.