If your home furnace has been making unusual noises, struggling to heat rooms evenly, or causing your energy bills to spike, it may be time to consider a replacement. However, a home furnace is a significant investment in terms of cost, comfort, and efficiency, so careful planning is essential. To help you make a smart, informed decision, here are four key factors to consider when replacing your home furnace.

1. Type of furnace
The first thing to do when replacing your home’s heating system is to decide on the type of furnace you want. Each type has pros and cons, so you need to consider your home’s setup, energy costs in your area, and your long-term heating needs to make the right choice.
For instance, a gas furnace is typically more cost-effective in the long term if natural gas is available in your area. These systems heat quickly and work well in colder climates. However, installing a gas furnace can be more complex and may require venting and access to a gas line.
On the other hand, electric furnaces are easier to install, and their initial installation cost tends to be relatively low. They also require less maintenance. However, they can be more costly to operate over time due to higher electricity prices in many regions. Check out this gas furnace vs electric furnace guide for more information.
2. Energy Efficiency Ratings
Energy efficiency should always be a top concern. A home furnace has an Annual Fuel Utilization Efficiency (AFUE) rating. This rating shows how efficiently the unit converts fuel into heat. A higher AFUE rating means less wasted energy and lower utility bills.
For instance, if you invest in a furnace with a 95% AFUE rating, 95% of the energy consumed is used to heat your home, with only 5% lost during the process. While high-efficiency models may cost more upfront, they often pay for themselves in savings over time. Look for furnaces with ENERGY STAR® certification, as they match the strict efficiency guidelines established by the U.S. Environmental Protection Agency.
3. Size
The size is perhaps one of the most significant considerations when replacing your home furnace. If you choose a unit that is too small for your home, you’ll have uneven heating and an overworked system that struggles to keep up, leading to higher energy expenses and a shorter lifespan.
A furnace that’s too large can cycle on and off too frequently, causing unnecessary wear and inefficient performance. Consider hiring a professional HVAC contractor to find the right size. A contractor will perform a load calculation while considering your home’s square footage, insulation, number of windows, ceiling height, and even the local weather to zone in on an appropriately sized system.

4. Installation and labor costs
Many homeowners focus on the price of the furnace itself but overlook installation costs. Professional installation is crucial for safety, performance, and efficiency. Even the best furnace can underperform or pose safety risks if not installed correctly.
Get estimates from multiple licensed HVAC contractors and ask what’s included in the installation, including ductwork adjustments, permits, or old unit disposal. Also, check if the contractor offers a labor and manufacturer’s warranty on the equipment.
Endnote
Replacing your home furnace involves more than picking a new unit. Familiarize yourself with the different types of furnaces, evaluate size and energy efficiency, and consider installation and labor costs to boost your home’s comfort and save on utility expenses.
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