How Much Should It Cost to Add a Fireplace or Furnace to Your Home?

Homeowners considering a new fireplace or furnace for their homes often underestimate the price range. Fireplace installation averages about $2,000, with furnace installation closer to $4,800.

That said, I’ve seen projects come in at half that and others at five times that amount. What you pay depends on the brand, efficiency, new build vs. retrofit, where you live, and other factors.

My wife and I got our education on this back in 2022 when we built in northern Indiana. We paid about $5,000 apiece for two vented natural gas fireplaces—one for the great room, another for our three-seasons room. The high-efficiency furnace to heat our 3,100 square feet came in at another $6,500.

Costs in this article are sourced from contractor estimates via Angi—furnaces and fireplaces.

Table of Contents

1. Fireplace and furnace cost at a glance
2. How much does it cost to install a fireplace?
   1. Fireplace installation costs by type
      1. Electric
      2. Gas
      3. Wood-burning
      4. Wood stoves
   2. Other fireplace cost factors
   3. New construction vs. retrofit costs
   4. Replacement and upgrade projects
3. How much does it cost to install a furnace?
   1. Furnace installation costs by type
   2. Furnace costs by home size
   3. Other furnace cost factors
   4. Efficiency ratings and long-term savings
4. Safety considerations for fireplaces and furnaces
5. How to finance a fireplace or furnace installation
   1. Home equity loan
   2. Home equity line of credit (HELOC)
   3. Cash-out refinance
   4. Personal loans and home improvement loans
6. Do fireplaces and furnaces add value to your home?
7. FAQ
   1. Should I install a fireplace or upgrade my furnace first?
   2. Can I claim a tax credit for a new furnace?
   3. Does a fireplace affect homeowners insurance?
   4. How long do furnaces and fireplaces last?

Fireplace and furnace cost at a glance

Project	Average cost	Typical range
Fireplace installation	$2,500	$150 – $8,700
Wood-burning fireplace (full build)	$15,000+	Up to $30,000
Gas fireplace insert	$3,700	$2,300 – $8,000
Electric fireplace	$1,000	$200 – $10,000
Furnace installation	$4,800	$2,800 – $6,900
Gas furnace	$7,000	$3,800 – $10,000
Electric furnace	$4,500	$2,000 – $7,000

How much does it cost to install a fireplace?

Fireplace installs average $2,500 or so. Quotes I’ve collected range from $950 on the low end to $4,200 before you get into anything custom. Electric units can go in for as little as $200. Full masonry wood-burning fireplaces are a different story altogether—foundation work, chimney construction, bricklaying—all of that pushes costs to $30,000 and beyond.

Our fireplaces ran $5,000 each back in 2022. That’s above the national average, but we were building new, chose higher-end custom models, and prices were elevated at the time due to worldwide supply chain issues. Our contractor mapped out gas lines and venting from day one instead of retrofitting around existing walls.

Fireplace installation costs by type

Electric

Electric fireplaces are the cheapest route. You can find plug-in units for $200. Custom built-ins with fancy surrounds climb toward $10,000. What you pay depends on the fireplace and whether the electrician needs to run new wiring or can just use what’s already there.

Labor for a basic wall panel is about $225. I’d recommend electric if you want flickering flames without stacking firewood or dealing with gas permits.

Gas

Gas fireplaces run $2,500 to $10,000 total. Wood-to-gas conversions? About $3,000. Vented units that exhaust outside hit closer to $5,000 once you add the flue work.

Wood-burning

Wood-burning fireplaces have the wildest price swings. Inserts (sealed fireboxes that slide into existing openings) go for $700 to $6,500. Full masonry construction is a different animal entirely.

Between foundation work, building the chimney, and laying all that brick or stone, you’re easily looking at $30,000. I’ve heard of projects topping $40,000 in high-cost-of-living areas.

Wood stoves

Wood stoves land in the middle at $1,500 to $4,000. Most people pay around $3,000. Catalytic stoves have a higher upfront price but burn cleaner.

Other fireplace cost factors

Your fireplace is just one piece of the puzzle. Watch out for these add-ons:

• Ventilation is $10 to $20 per linear foot of flue or chimney pipe.
• Gas line work tacks on $200 to $1,000. Already have gas service near where the fireplace will go? You’ll pay less. Need to run pipe across the house? That’s when costs jump.
• Electrical for blowers, electronic ignition, or powering an electric unit runs $150 to $200 in most cases.
• Chimney cleaning and inspection is around $250. Problems drive up the price. Cracked liners, bad mortar, water getting in where it shouldn’t—any of those can run you $1,000 to $5,000 to fix.
• Surround materials add up. Ceramic tile is around $60 per square foot with installation. Stone veneer actually costs less at $10 to $20 per square foot. Marble and granite are the pricey options—$300-plus per square foot.

New construction vs. retrofit costs

Fireplaces cost less when you’re building a house from scratch. Your contractor handles gas lines, framing, and venting as part of the normal construction sequence. No demo, no surprises in the walls.

Retrofitting is messier. You’re cutting into finished rooms, maybe rerouting plumbing or electrical, and figuring out how to punch a vent through your roof without causing problems. Permits add complexity, too. I’d estimate retrofits cost 20% to 40% more than equivalent new-construction work based on contractor quotes we collected during our build.

Replacement and upgrade projects

Replacing an existing fireplace falls between new construction and full retrofit costs. A wood-to-gas conversion runs about $3,000 because the opening and chimney are already there. That covers the insert, gas connection, and a new liner if you need one.

How much does it cost to install a furnace?

Most folks pay around $4,800 for furnace replacement. Although, prices range anywhere from $2,800 to $6,900, with some over $13,100 for high-end systems in larger houses.

We spent about $6,500 on our 96% Annual Fuel Utilization Efficiency (AFUE) natural gas furnace during our 2022 build. That got us a unit properly sized for 3,100 square feet in northern Indiana, where temps drop below zero plenty of times each winter.

Furnace installation costs by type

• Electric furnaces run $2,000 to $7,000. They work fine in the South or Southwest where you’re only running heat a few months out of the year. In cold states, your electric bill will let you know why most people heat with gas.
• Natural gas furnaces go for $3,800 to $10,000 at standard efficiency. Bump up to high-efficiency and you’re looking at $12,000. If gas is available where you live and winters get cold, gas heat will save you money over time.
• Oil furnaces cost $2,500 to $10,000, with $5,000 being typical. Common in the Northeast and rural areas where gas pipelines don’t reach.
• Propane furnaces are $3,700 to $14,200. The tank explains the spread. Above-ground propane tanks start around $700. Buried tanks hit $8,000 or more.

Furnace costs by home size

Furnace sizing comes down to British thermal unit (BTU) output. The general rule is 30 to 60 BTUs per square foot of living space. Mild climates stay near 30. Cold climates push toward 60.

Home size	Estimated cost range
1,500 sq ft	$1,800 – $3,000
2,000 sq ft	$2,400 – $4,000
3,000 sq ft	$3,600 – $6,000
4,000 sq ft	$4,800 – $8,000

Square footage gives you a rough idea, but there’s more to it. Your climate plays a big role. So does insulation. A century-old farmhouse with original windows needs way more heating capacity than a modern build with the same floor plan.

Other furnace cost factors

• Labor runs $75 to $100 hourly for heating, ventilation, and air conditioning (HVAC) work. Total labor on a straightforward furnace swap is $500 to $2,000.
• Permits cost $400 to $1,500 where required. Your contractor should pull them, but confirm before signing.
• Hauling away the old unit adds $60 to $350. Some contractors include removal; others bill it separately.
• New ductwork costs $2,000 to $5,000 if what you have is damaged or doesn’t work with the new furnace.
• Yearly maintenance is $60 to $550. Worth every penny—regular service extends your furnace’s life and catches small problems early.

Efficiency ratings and long-term savings

AFUE tells you how much fuel your furnace actually turns into heat. A 96% AFUE rating means 96 cents of every gas dollar heats your house. The other 4 cents goes up the flue as exhaust.

Furnaces rated 96% AFUE or higher cost more to buy. But your monthly gas bills will be noticeably lower. Mid-tier units (90% to 95% AFUE) offer a middle ground between price and efficiency. Budget models in the 80% to 89% AFUE range are cheaper at the store but more expensive to operate every winter.

We run heat from November through March here in northern Indiana, so the high-efficiency option made financial sense for us.

Safety considerations for fireplaces and furnaces

Don’t take gas or wood-burning appliances lightly. People get hurt when they skip precautions.

Carbon monoxide (CO) detectors belong in every room with fuel-burning equipment. CO has no smell, and you can’t see it. By the time you feel symptoms, you’re already in trouble. CO kills hundreds of Americans every year.

Get a professional to inspect your chimney, flue, and heating equipment every year. Wood-burning systems accumulate creosote, and that stuff catches fire when it builds up. Gas connections can loosen gradually and leak—you won’t notice until it’s a problem.

Anything flammable needs to stay three feet away from your fireplace at a minimum. Use a spark screen. Don’t walk away from a burning fire. The U.S. Consumer Product Safety Commission has more on fireplace safety. The UEU.S. Environmental Protection Agency’s (EPA)BurnWise program covers wood-burning best practices.

How to finance a fireplace or furnace installation

Most people can’t write a $5,000 to $10,000 check for a heating project without feeling it. Here are some ways to spread out payments.

Home equity loan

A home equity loan uses your house as collateral. The bank hands you a lump sum and you repay it over five to 30 years at a fixed rate. Interest beats credit cards since the lender has collateral. Here are the best home equity loans.

Home equity line of credit (HELOC)

A HELOC works differently. You get approved for a credit limit and draw money as you need it. Good option if you’re not sure what the final bill will be, or if you’re planning to do several projects over the next year or two. Here are the best HELOCs.

Cash-out refinance

With a cash-out refinance, you trade your current mortgage for a bigger one and keep the difference. Only makes sense if today’s rates are lower than what you’re already paying. Here are the best cash-out refinance companies.

Personal loans and home improvement loans

Personal loans don’t require equity. Lenders look at your credit score and income. Interest is higher than secured options, but your house isn’t on the line if something goes wrong. Here are the best personal loans.

Do fireplaces and furnaces add value to your home?

Fireplaces tend to return about 70% of what you put into them when you sell. Spend $10,000, and your home might appraise for $7,000 more. Not a profit, but better than most renovations.

Furnaces don’t add value the same way. Nobody pays extra for working heat—buyers assume it works. But an old or failing furnace gives buyers negotiating leverage. Updated equipment removes that problem. House hunters shopping for energy-efficient homes notice details like how old the furnace is and what its efficiency rating looks like.

FAQ

Should I install a fireplace or upgrade my furnace first?

The furnace comes first if yours is struggling. Your furnace is what keeps pipes from freezing and everyone in the house comfortable. Fireplaces are extras. When the budget is tight, put your money toward heat. That beautiful stone fireplace won’t do you any good when it’s 10 below and your furnace just died.

Can I claim a tax credit for a new furnace?

No—however, your state, county, city, or utility company may offer a rebate. Natural gas furnaces with ENERGY STAR certification and at least 97% AFUE used to qualify for a federal tax credit up to $600—that credit expired on December 31, 2025.

Does a fireplace affect homeowners insurance?

It might. Wood-burning fireplaces mean more fire risk in insurers’ eyes, so some will charge you more. Gas and electric units rarely move the needle. Get in touch with your insurer before you break ground to find out how it’ll affect your rates.

How long do furnaces and fireplaces last?

Furnaces run 15 to 30 years if you take care of them. Gas fireplaces hold up for 15 to 25 years. A well-maintained masonry fireplace and chimney? Those can last 50 years, sometimes longer. Electric inserts have shorter lifespans—figure 10 to 20 years.

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