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Average HVAC Replacement Costs and Financing

Average HVAC Replacement Costs and Financing
Austin Kilham
Austin KilhamUpdated May 30, 2023
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Your heating, ventilation, and air conditioning (HVAC) is critical for cooling and heating your home. The average lifespan of an HVAC system is at least 10 years, however, it could start to fail or become much less efficient before that. Replacing an HVAC system can be costly. The average HVAC system cost is $7,000, and the price typically ranges between $5,000 and $10,000.  What you’ll end up paying depends on a variety of factors. Here’s a closer look at everything that might affect cost, and how to pay for an HVAC replacement. 

Reasons Your HVAC System May Need to Be Replaced

Improper maintenance, regular wear and tear, a malfunctioning thermostat, and dirty condensers or coils, are some of the reasons an HVAC may need to be replaced.Here are some signs that might indicate that it’s time for an HVAC replacement: 
  • Your energy bills are increasing. Bigger bills could signal that your system has become less efficient. 
  • Inconsistent temperatures: Failing systems have a harder time maintaining consistent temperatures. If your house is hotter or colder than it should be, it may be time for an HVAC replacement.  
  • More dust or poor air quality: An HVAC system also filters the air in your house. More dust, or air quality that isn’t as good as it once was, can indicate a problem. 
  • Loud sounds or strange smells: Failing equipment may cause grinding or squealing noises and/or burning smells. A moldy smell could also signal that your HVAC is no longer doing its job properly. 
If you notice any of these, call an expert and have your HVAC system inspected. Recommended: Mold Remediation Financing

Average Costs of HVAC Replacement

The average HVAC system cost is $7,000. But that price largely depends on which part of the system you’re replacing. For instance, an air conditioner costs anywhere from $3,800 to $7,500. A new furnace could cost as much as $6,300, and a boiler and a heat pump could each cost more than $7,000. This could be more than you have in savings, but fortunately, there are HVAC financing options to help.

Do You Need Ductwork Replacement?

Ductwork is what transports the heated or cooled air from your HVAC system to the rooms in your home. The signs of a failing HVAC system listed above might also signal that your ductwork needs some repairs. Also, be on the alert for accumulated debris around the vents in your home, which could be a sign that the ducts need to be inspected by a professional. Finally, if your family members start having an uptick in respiratory problems, such as dust allergies or mold allergies, there may be leaks in the ductwork system. New ductwork typically costs between $500 and $2,000.

Factors That Impact Replacement Costs

HVAC replacement cost is influenced by a number of different factors. The cost of the materials could be $10,000 or more, depending on how much of the system needs replacing. You’ll also pay labor costs of $500 to $2,500 for removing the old system and installing the new one. Disposal of the old materials should be covered in the labor cost, but check with the contractor to make sure it is. The climate in your area will also impact the HVAC replacement cost. For example, if you live in a hot climate, you’ll need a more powerful air conditioning unit, which will be more expensive. Those in colder climates will need a furnace that puts out enough heat, which will be pricier. When you replace an HVAC system, you might also decide to add insulation or winterize your house. That can also increase the cost of HVAC replacement. 

Hidden Costs and Considerations

Depending on your home, there may be some additional unexpected work required, which can drive up the cost of HVAC replacement. For instance, If you live in an old house, it might contain hazardous materials, such as asbestos. You’ll need to hire specialists to safely remove and dispose of it. On average, asbestos removal costs $500 to $1,000. Recommended: 8 Home Renovation Tips for Homeowners

How to Save Money on HVAC Replacement

If you’re feeling sticker shock at the HVAC system cost, there are steps you can take to help you save money on a HVAC replacement. First, get quotes from several HVAC companies to get the best price for the job. In addition, consider having your system replaced in the off-season, if possible. The busiest seasons for HVAC companies are fall and spring. You might be able to get a better deal if you have your HVAC replaced during the winter or summer months instead. 

Are There Rebates for HVAC Systems?

Both the federal government and your state and local government may offer rebates for installing a new, more efficient HVAC system. Through the federal government’s Energy Star program, for instance, homeowners can receive a tax credit of up to $600 when they install a new central air conditioning system. In addition, be sure to research the incentives in your state and city. And find out if HVAC manufacturers are offering rebates. These can often be used in tandem with government rebates to increase your savings even more. 

HVAC Financing Options

The simplest and least expensive way to pay for an HVAC system is with cash. But because the HVAC system cost is substantial, you may not have the money on hand to pay for it. In that case, HVAC financing is an option. If you’re considering financing for HVAC replacement, here are some ways to do it.Home equity loan. You may consider borrowing against the value of your home through a home equity loan. With this method, you get a lump sum, which you pay back in regular installments. Because your home backs the loan, you may be able to get a relatively low interest rate. However, if you fail to make your loan payments, the lender could seize your house to recoup their losses. Home equity line of credit. A home equity line of credit (HELOC) is another option for HVAC financing. This is a form of revolving credit that allows you to borrow against your home up to a certain limit. But keep in mind that because your home is the collateral with a HELOC, you risk losing your house if you don’t repay the loan. Personal loan. You could take out a personal loan for HVAC financing. Personal loans can be used for almost any purpose, and personal loans for home improvement are a common way to fund home repairs. With a personal loan, a bank, online lender, or credit union lends you a lump sum that you repay with interest in installments over time. There are small personal loans available that could cover the cost of your HVAC replacement. Personal loans are typically unsecured, meaning you don’t need collateral for them, but they may have higher interest rates than home equity loans. Generally, the higher your credit score, the lower the interest rate you may get.  By shopping around our list of the top personal loans, you can find the best option you may qualify for. Generally, the higher your credit score, the lower the interest rate you may get. HVAC in-house financing. Finally, HVAC in-house financing may be available through some HVAC providers. If you’re replacing an air conditioner only, there also are AC unit financing options you could consider. Just be sure to compare HVAC financing rates to other traditional financing methods. 

The Takeaway

An efficient HVAC system is the key to keeping your home properly cooled and heated. When it’s time for your HVAC system to be replaced, the cost can be significant, but there are ways to save money, including rebates. In addition, there are a variety of financing options available to help you cover the cost of HVAC replacement, such as HVAC in-house financing, home equity loans, and personal loans. If you’re considering a personal loan to cover your HVAC system cost, Lantern can help you compare rates and terms to find the best deal. By filling out one quick application, you’ll get offers from multiple lenders in our online marketplace. That makes it easy and convenient to evaluate the options and choose the right one — so that you can move forward with getting your HVAC system replaced. Compare rates with Lantern and see what you may qualify for.

Frequently Asked Questions

How often should you replace your HVAC system?
What are general installation fees for HVAC replacement?
Are HVAC installation prices negotiable?
Photo credit: iStock/sturti

About the Author

Austin Kilham

Austin Kilham

Austin Kilham is a writer and journalist based in Los Angeles. He focuses on personal finance, retirement, business, and health care with an eye toward helping others understand complex topics.
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