Furnace Replacement Cost in Minnesota (2026)

A new furnace installed by us runs $4,500–$9,500. That range covers two different kinds of furnace: roughly $4,500–$6,000 for an 80% AFUE furnace and roughly $6,500–$9,500 for a 96–98% condensing one. Knowing which one fits your house gets you most of the way to a real number, and the venting is what usually decides the rest.

AFUE is the share of the fuel that becomes heat in the house. An 80% furnace sends a fifth of it up the chimney. A 96–98% furnace pulls so much heat from the exhaust that water condenses out of it, which is why it vents through plastic pipe and needs a drain. With the length of a Minnesota heating season, the condensing furnace is the usual choice for a house you plan to stay in. The 80% furnace still earns its place when a wall or roof vent is hard to route, when the house is being sold soon, or in a space that barely runs. 96% vs 98% AFUE covers the finer differences.

What makes a furnace replacement cost more or less?

The same efficiency can land low or high in its band. These are the items that move it:

• Staging. A single-stage burner runs full fire every time. Two-stage and modulating furnaces run a lower fire most of the winter, which evens out temperatures between floors and quiets the system. They cost more.
• Blower. A variable-speed blower costs more than a basic one and pays back in comfort, quieter operation and lower electric use if you run the fan a lot.
• Product line. Most manufacturers sell a basic, a middle and a top line, and the line you pick moves the price more than the name on the cabinet. Our guide to the best furnace brands for Minnesota winters compares them.
• Venting. Reusing a sound existing vent is the cheapest case. Converting from a chimney to PVC, or rerouting an old PVC vent to a better spot, adds labor and material.
• The water heater. If the gas water heater shared the chimney with the old furnace, it may need a liner or a different vent once the furnace leaves the chimney (more below).
• Condensate. A floor drain nearby is simple. No drain means a condensate pump.
• The AC coil. The coil sits on top of the furnace. A new furnace may need a transition piece, or a new coil if the air conditioner is due too.
• Fuel. Propane homes need the furnace set up for propane, which is part of the install.
• Access. A roomy basement is the easy case. A closet furnace in a townhome, a crawlspace or a tight utility room takes longer.
• Permit. Replacing a furnace needs a mechanical permit, which we pull and list on the quote. See our permit guide.

So a single-stage 80% furnace swapped onto an existing chimney vent sits at the bottom of the 80% band. A modulating 98% furnace with a variable-speed blower, a new PVC vent, a chimney liner for the water heater and a condensate pump sits near the top of the 96–98% band.

Why does venting add to a furnace replacement cost?

Going from 80% to condensing means two PVC pipes, intake and exhaust, usually out through the rim joist. In Minnesota the terminations have to clear the expected snow line and stay away from windows, doors and the gas meter. A termination tucked into an inside corner where snow drifts will shut the furnace down in January, so placement matters more here than the drawings in the manual suggest. How to clear a frozen furnace vent shows what happens when it's wrong.

Then there's the water heater. Once the furnace leaves the chimney, a gas water heater left behind is venting alone into a flue sized for two appliances. The flue can run too cool, condensation forms inside the chimney and the draft suffers. The usual fixes are a properly sized chimney liner or a different venting setup for the water heater. We check this on every conversion and put the fix in the quote.

Sizing comes from a Manual J, not the old nameplate

The furnace coming out of your basement tells us what someone installed 20 years ago. Since then you may have added insulation, replaced windows or finished the basement, and many older furnaces were oversized to begin with. We size every replacement with a Manual J load calculation against a Minnesota winter design day. The right new furnace is sometimes smaller than the old one, which can lower the price and usually improves comfort, because an oversized furnace short-cycles.

How it plays out in different Twin Cities houses

These are typical situations by house type, not quotes for a specific job:

• 1910s–1950s city houses. Much of Minneapolis and Saint Paul. The furnace usually vents into a brick chimney it shares with the water heater, basement ceilings are low, and ducts left from a gravity conversion can be short on return air. A condensing furnace there means PVC routed to a side wall that clears the neighbor's windows, plus a venting fix for the water heater. Our Minneapolis HVAC cost page and Saint Paul HVAC cost page cover those city details, including which gas utility serves you.
• 1970s–1990s ramblers and split-levels. The furnace often sits in an open utility room with a short run to an outside wall, so venting stays simple. Small return ducts are the usual weak spot, and the AC coil on top may be due at the same time.
• 2000s and newer houses. Many already have a condensing furnace with PVC venting and a drain nearby, so the replacement is closer to a swap, as long as the existing vent meets the new furnace's installation manual.
• Propane and acreage homes. The new furnace gets the manufacturer's propane conversion, and the propane supplier is part of the startup.

Has the furnace tax credit ended, and what rebates remain?

• Federal: the 25C tax credit ended for furnaces placed in service after December 31, 2025.
• CenterPoint Energy: runs heating system rebates for high-efficiency furnaces. It lets you use the heating dealer of your choice, the equipment has to be installed in 2026, and the application has to go in the same calendar year. A proposal or estimate doesn't count as proof of purchase.
• Xcel Energy: Saint Paul and other Xcel gas customers have Xcel's heating equipment rebates, which point to participating contractors. Ask whether the rebate you want requires one.
• State: Minnesota's home energy rebate program under the Inflation Reduction Act had not launched as of mid-2026.

We help with rebate paperwork where the program allows it. Amounts change yearly, so check the current offer with your utility. Our 2026 rebate guide has more.

When should you repair a furnace instead of replacing it?

We usually repair a 9-year-old furnace with a bad inducer motor, and we usually replace a 22-year-old one with the same problem. The deal-breakers are a cracked heat exchanger on an out-of-warranty furnace (see cracked heat exchanger symptoms), repeat no-heat calls, and parts that are getting hard to find. Our furnace repair cost guide puts the common repairs next to these numbers. If you're replacing anyway, it's also the moment to ask whether a heat pump paired with the new furnace makes sense; our heat pump installation cost guide covers dual fuel pricing.

What to do next

If you're not sure the old furnace is finished, a service call answers that first, and the $79 trip charge is waived if you approve a repair instead. If it is finished, call 612-429-3465 and we'll do the load calculation and write up both efficiency options, with the same pricing in every town we serve. Every quote spells out:

• the furnace model, efficiency and staging
• removal of the old furnace
• venting, condensate and any water heater venting fix
• gas, electrical and duct connections
• the permit
• startup checks of gas pressure, temperature rise and combustion

Installs carry our 2-year labor warranty on top of the manufacturer's parts warranty, and financing is available. Our furnace installation page shows what every install includes.

Questions

Sources

• heating system rebates centerpointenergy.com