The short answer for a typical Hamilton-area house in 2026: about $4,500 to $6,000 installed for a 96 percent single-stage gas furnace, $5,500 to $7,500 for a two-stage model, and $7,000 to $9,500 for a modulating furnace with a variable-speed blower. Most houses land in the middle band. Anything far outside those ranges deserves a question.
Those are installed prices: the furnace, the labour, the new venting, the condensate drain, the sheet metal, the removal and disposal of the old unit, the start-up test and the inspection. A quote that looks cheaper is often missing one of those lines.
What the three tiers mean
- Single-stage, 96 percent AFUE. The burner is either on at full fire or off. Cheapest to buy, slightly less even heat, perfectly adequate for a smaller or well-insulated house. The right choice more often than salespeople admit.
- Two-stage, 96 to 97 percent. The burner runs at about 65 percent most of the time and steps up to full fire only in a cold snap. Longer, gentler cycles, fewer temperature swings, quieter, and usually paired with a multi-speed blower. The best value for most Hamilton homes.
- Modulating, 97 to 98 percent. The burner adjusts continuously in small steps and the variable-speed blower matches it. The steadiest heat and the lowest gas use, at a higher purchase price that a mid-size house will take a long time to recover in gas savings. Worth it for comfort in a large or drafty house, or where humidity control matters.
An 80 percent mid-efficiency furnace is no longer worth buying in Ontario. The gas saving from a condensing unit pays the difference within its life, and the venting rules make the old type harder to install in most houses anyway.
What moves the price
- Size. Furnaces are sold by heat output, typically 40,000 to 120,000 BTU for a house. Bigger costs more, and oversized is worse than right-sized: it short-cycles and wears out early. Insist on a heat-loss calculation, not a guess from the old label.
- Venting. A high-efficiency furnace vents in PVC through the wall, not up the chimney. A straightforward run adds little; a long or awkward one adds a few hundred dollars. If a water heater shared the old chimney it may need a liner or its own change.
- Ductwork. Sealing and a new plenum are normal. Replacing undersized trunk lines in a century home is not, and it is quoted separately if it is needed.
- Gas line. A larger furnace or a conversion from oil or electric may need a larger supply line.
- Thermostat. A basic programmable thermostat is included or nearly so; a communicating thermostat for a modulating furnace is a few hundred more.
- Brand. The big names cost more for similar efficiency. The installation matters more than the badge; a well-installed mid-range furnace outlasts a badly installed premium one.
Three quotes, one comparison
Compare quotes on the same basis. Ask each contractor for the model number, the AFUE rating, the stage, the blower type, the warranty on parts and on labour, and whether the price includes removal, venting, the condensate neutralizer, the inspection and the permit. Ask for the heat-loss calculation; if a contractor sized the furnace without measuring the house, they guessed.
A written price before the work, with nothing added on the day, is the standard in this trade. If a quote is verbal, ask for it in writing.
Rebates and financing
Rebate programs in Ontario change through the year, and most current money is aimed at heat pumps and insulation rather than gas furnaces on their own. We check what applies when we quote; the furnace rebates guide summarises the programs. Financing spreads the cost over several years; the interest is real, so compare it against a line of credit.
When a repair is the better money
If the furnace is under twelve years old and the repair is less than a third of the replacement price, repair it. Over fifteen years with a cracked heat exchanger or a failed control board, replace it. The reasoning, with numbers, is in repair or replace?, and the ranges for common repairs are on the furnace repair page.
How the day goes
Most replacements take one working day. The old unit comes out in the morning, the new one is set, vented and connected, the gas line is pressure-tested, the furnace is fired and combustion-tested, and the thermostat is set up before the technician leaves. The municipal gas inspection is booked for you. Expect the house to be without heat for most of the day, so in January it is worth planning for.
For a written installed price for your house, with the heat-loss calculation included, ask for a furnace installation quote.
Written by the 365 Heat technical team, TSSA-certified gas technicians working in Hamilton-area homes every day. General information for homeowners, not a diagnosis of your system; call for advice on your own furnace.
