Quick answer
As of October 2026, replacing a gas furnace in Waterloo Region typically costs $4,500 to $10,500 installed. Where you land depends on the type: a single-stage high-efficiency furnace sits near the bottom of that range and a fully modulating one near the top. Replacing the furnace and central air conditioner together typically runs $10,000 to $17,000. These are typical market ranges for Kitchener, Waterloo, Cambridge and Guelph, not Falconridge prices. Your quote depends on the size of the furnace, venting, ductwork, access and the brand.
Typical furnace replacement cost by type
Furnace replacement cost depends mostly on how the furnace controls its flame and blower. Under federal energy efficiency regulations, most new gas furnaces sold in Canada must be at least 95% AFUE. So the real choice is between single-stage, two-stage and modulating models, not between “mid” and “high” efficiency.
| Furnace type | Efficiency | How it works | Typical installed range* |
|---|---|---|---|
| Single-stage | 95–96% AFUE | Burner is either on full or off | $4,500 to $6,500 |
| Two-stage | 96% AFUE | Low fire most of the time, high fire on the coldest days | $5,500 to $8,000 |
| Modulating | 97–98% AFUE | Adjusts the flame in small steps to match demand | $7,000 to $10,500 |
| Furnace + central AC together | n/a | Both replaced in one visit | $10,000 to $17,000 |
*Our estimates of the Waterloo Region market as of October 2026, based on published Ontario contractor price guides. Not quotes, and not Falconridge prices. Your price depends on the factors below.
Which one is worth it? In a typical Waterloo Region home, the efficiency gap between a 96% two-stage and a 98% modulating furnace is small. What you mostly notice is comfort: steadier temperatures, quieter operation and better humidity control. Two-stage is a common middle ground. Modulating makes the most sense in larger homes, homes with hot and cold rooms, or if you’re staying for a long time.
What changes the price: size and the house
Furnace size is measured in BTUs per hour. Most detached homes in Waterloo Region use furnaces between 40,000 and 100,000 BTU/h input. Older furnaces were often oversized, so a proper heat loss calculation frequently shows a smaller furnace will do. A furnace that fits the house runs longer, quieter cycles and costs a little less.
Beyond size, these factors move a quote:
- Venting. High-efficiency furnaces vent through plastic (PVC or CPVC) pipe out a side wall or the roof. If you’re replacing an old mid-efficiency furnace that used the chimney, the new vent has to be routed, and the remaining gas water heater may need a chimney liner or its own new vent.
- Condensate. High-efficiency furnaces produce water that has to drain to a floor drain or a condensate pump.
- Ductwork and the plenum. A new furnace almost always needs new transitions to fit the existing supply and return ducts. Undersized returns are common in older Kitchener and Cambridge homes and may need work.
- Access. Furnaces in tight crawlspaces, attics or finished basements take longer to swap.
- The AC coil. If your central air conditioner is still good, its coil sits on top of the furnace and has to be removed and reinstalled. If the AC is old and uses R-22 refrigerant, replacing both at once often makes sense.
- Brand and warranty registration. We install Lennox and York. Warranty terms vary by manufacturer and model, so read the registration requirements on any quote you get.
What a fair furnace replacement quote should include
A furnace replacement quote in Ontario should spell out the whole job, not just the equipment. Compare quotes line by line. If one is much cheaper, it’s often because something below is missing.
| Item | What to look for |
|---|---|
| Heat loss / sizing | How they chose the size, not just “same as the old one” |
| Equipment | Exact model number, AFUE, single-stage, two-stage or modulating, and blower type |
| Removal and disposal | Taking out and disposing of the old furnace |
| Venting | New PVC/CPVC intake and exhaust, termination location, and any chimney liner for an orphaned water heater |
| Gas piping | Reconnecting to the gas line, shut-off valve and leak test |
| Condensate | Drain routing or a condensate pump |
| Duct transitions | New supply and return plenums and transitions |
| Thermostat | Reuse, new standard, or new smart thermostat |
| Filter | Cabinet or media filter type |
| Commissioning | Combustion check, gas pressure, temperature rise and a safety check |
| Permits and code | Who arranges any municipal permit, and confirmation that the work is done by a TSSA-registered contractor with licensed gas technicians |
| Warranty registration | Who registers the equipment with the manufacturer, and by when |
About TSSA and permits. In Ontario, gas appliance installation is regulated by the Technical Standards and Safety Authority (TSSA). The company has to be a TSSA-registered contractor, and the person doing the gas work has to hold a valid gas technician certificate. Municipal building permit rules for HVAC replacement vary by city and by scope, so ask the contractor to confirm in writing what applies to your job.
When to replace a furnace instead of repairing it
You should usually replace a furnace instead of repairing it when it’s past about 15 years old and facing a major repair. Replace it right away if it has an unsafe condition that can’t be fixed economically. Here’s a simple way to decide:
- Safety first. A cracked heat exchanger or a carbon monoxide problem that can’t be corrected means replacement. If a technician has red-tagged your furnace, read our guide on what a red-tagged furnace means.
- Age. Most gas furnaces in Ontario last about 15 to 20 years with maintenance. Past that, parts for some models get hard to find.
- The one-third rule. If a repair costs more than about a third of a new furnace and the unit is over 12 to 15 years old, the money usually goes further on a new one.
- Repeat failures. Two or three service calls in one winter for the same unit is a sign.
- Comfort. Hot and cold rooms, dry air, or a noisy blower can all be improved with a properly sized two-stage or modulating furnace and some duct work.
If your furnace is still young and something has simply failed, such as an igniter, flame sensor, inducer motor or pressure switch, a repair is usually the right call. Our furnace repair page covers the common faults.
Planned replacement vs a mid-winter emergency
A planned furnace replacement almost always goes better than an emergency one. When a furnace fails in January, you have less time to compare quotes, less choice of equipment in stock, and more pressure to take whatever is available. If your furnace is past 15 years old, it’s worth getting a replacement quote in the summer or early fall, while it still works.
A planned replacement lets you:
- get two or three written quotes and compare them line by line, using the table above
- talk through sizing instead of just matching the old furnace’s size
- decide calmly whether to replace the AC at the same time, or add a heat pump
- check rebate eligibility and arrange financing before the work starts
- book the install for a mild day, so the house isn’t cold while the old furnace is out
Most straightforward furnace swaps take about a day. Jobs that need a new venting route, duct changes or AC work can take longer. If your furnace does fail in deep cold, keep pipes from freezing with safe electric space heaters. Don’t run a gas oven or barbecue indoors for heat.
Should you rent instead?
Rental and rent-to-own programs advertise “no money down”, but over a furnace’s life you usually pay much more than buying outright. Some contracts are also hard to exit when you sell. Before you sign one, read our guide to renting vs buying a furnace or water heater. If cash flow is the issue, regular financing lets you own the equipment from day one.
Is now the time to consider a heat pump?
If you’re replacing a furnace and your AC is also near the end of its life, it’s worth pricing a dual-fuel setup: a new high-efficiency furnace paired with a cold-climate heat pump in place of the AC. As of October 2026, the Home Renovation Savings Program offers up to $2,000 for a qualifying heat pump in an Enbridge gas-heated home. It has no rebate for gas furnaces themselves. Kitchener Utilities gas customers are currently excluded from that gas-heated rebate path.
Running costs and comfort trade-offs are laid out in our heat pump vs furnace guide.
Furnace replacement in your city
Housing stock shapes the job. A 1960s backsplit in Cambridge, a post-war bungalow in central Kitchener, and a newer two-storey in Guelph’s south end each come with different venting, duct and access issues. We cover local details on our city pages, including furnace installation in Kitchener, and our main furnace installation and replacement page explains what to expect on install day.
How to keep your new furnace running longer
- Change the filter on schedule. A clogged filter is the most common cause of overheating and short cycling.
- Book a yearly tune-up, which includes a combustion check, a look at the heat exchanger, and cleaning the flame sensor and burners.
- Keep the intake and exhaust vents outside clear of snow and ice.
- Install CO alarms. As of January 1, 2026, Ontario’s Fire Code requires one outside each sleeping area and on every storey of a home with a fuel-burning appliance.
- Keep the area around the furnace clear of storage.
Prices in this guide reflect typical Waterloo Region ranges as of October 2026. Equipment prices and rebate programs change, so always get a written quote for your home.