Heat pump vs furnace, which costs less?

The short version

On Fixr's figures the heat pump costs about $3,550 more to install, our subtraction. On This Old House's comparison page the furnace average sits only $544 above the bottom of the heat pump range, our comparison. Those are not the same answer, and the difference is not small.

Why one publisher has two heat pump prices

This matters more than the comparison itself, so we are putting it first.

This Old House's comparison guide prices a heat pump at $4,236 to $7,904 and carries this footnote directly beneath:

*Cost figures via 2024 data from Angi.com.

Its own heat pump cost guide, updated four months later, gives $8,042, which it attributes to a 2026 survey of 1,000 homeowners. That average is $138 above the top of the comparison page's range, our comparison.

So the same publisher has two heat pump figures: one borrowed from Angi and two years old, one collected first-hand and current. They are not contradictory statements about the market; they are a stale figure and a fresh one sitting on two pages that do not reference each other.

Our conclusion, and what we use on this page. We follow the newer figure, because an independent publisher supports it: Fixr's $8,350 sits $308 above This Old House's $8,042, our subtraction, which is close agreement by the standards of this topic. Two current sources agreeing beats one older borrowed figure. Our heat pump page sets out both in full.

This is the third time this section has found This Old House disagreeing with itself across its own pages. Our whole system page found three different air conditioner prices across two of its guides.

So the real comparison

Our arithmetic, marked as ours, using the two current sources only. A heat pump at $8,350 against a furnace at $4,800 is roughly 1.7 times the price, a difference of $3,550.

But the comparison as stated is not fair, and neither publisher says so plainly. A furnace only heats. A heat pump heats and cools. If you need cooling too, the furnace needs an air conditioner beside it, which our central air page prices from two publishers, and our whole system page prices the pair bought together.

So the honest framing is this:

• If you already have working air conditioning and only the heating has failed, the furnace at $4,800 is the cheaper purchase by a wide margin.
• If both are being replaced, the heat pump at $8,350 replaces both machines and is the cheaper purchase.

Fixr puts the second case in numbers, citing the National Renewable Energy Laboratory: against replacing a furnace and a central AC system, and assuming the heat pump lasts 15 years, the all-in savings are between $9,700 and $14,950.

Our note: that figure combines an upfront saving with fifteen years of running cost, and Fixr says so. It is not money back in year one.

The efficiency ratings do not compare

This is where most comparisons quietly mislead. The two machines are rated on different scales:

AFUE is a percentage of fuel converted to heat, so 98% is nearly all of it and 100% is the ceiling by definition. SEER and HSPF are ratios of output to electricity used, and a heat pump moves heat rather than making it, so it can deliver more energy than it consumes. The numbers are not on the same scale and cannot be compared directly, which is our reading and the reason we have not built a league table out of them. What SEER itself measures, and why the same machine now carries two of them, is on our SEER rating page.

This Old House's own HVAC expert makes the same point about fuel prices:

Electricity is billed to you in price per kilowatt hour... propane and oil are billed to you in price per gallon... and nat[ural gas]

Our conclusion: running cost depends on your local electricity price against your local gas, propane or oil price, and no national guide can tell you which wins at your address. What we can tell you is the stake: This Old House cites the Department of Energy for heating being about 45% of the average home's total energy cost.

Lifespan changes the arithmetic

This Old House gives heat pumps 10 to 15 years and furnaces 15 to 20 years. Fixr's furnace guide says most furnaces last 15 to 20 years, with oil furnaces up to 25 and electric ones 20 to 30. Fixr's heat pump guide says 10 to 15 years.

Both publishers agree, which is rare enough here to be worth stating.

Our arithmetic, marked as ours. A heat pump at $8,350 over 12.5 years, the middle of its range, is about $668 a year of equipment. A furnace at $4,800 over 17.5 years is about $274 a year. On equipment cost alone the furnace is less than half as expensive per year, and that is before the air conditioner the furnace does not include. Our lifespan page collects what every source says about how long each machine lasts.

Where climate decides it

This Old House is direct: in cold climates with long, harsh winters, furnaces are often the more reliable and cost-effective choice, because a furnace maintains its heating efficiency regardless of outdoor temperature. A heat pump's efficiency falls as it gets colder, which is the physical reason, not a brand difference.

Our note, marked as ours: we are not going to give you a temperature threshold, because neither source publishes one and we will not invent it. The practical question for a cold-climate house is what the back-up heat is and what it costs to run, and that belongs in the quote rather than in a national guide.

Before you choose

1. Ask whether the quote includes cooling. It decides which of the two comparisons above applies to you, and it is the single biggest factor.
2. Ask for both quotes from the same contractor. The national averages differ by a factor of 1.7; your two quotes may not.
3. Get your own electricity and gas rates out. The running cost comparison cannot be done without them, and no guide can do it for you.
4. Ask what the back-up heat is on a heat pump, and what it costs per hour to run in a cold snap.
5. Check the date on any figure you are shown, including ours. On this topic a two-year-old number is off by nearly half.

If the machine itself is what you want explained rather than its price, our how a heat pump works page covers the four types and why the two efficiency ratings on this page cannot be compared directly. If your house is heated by water rather than warm air, the comparison you actually want is on our furnace vs boiler page. The furnace side of this comparison splits by fuel on our gas, electric, propane and oil furnace pages, and what a heat pump costs when it goes wrong is on our heat pump repair page.