Replacing an HVAC system isn’t something most homeowners have to do very often. The Department of Energy recommends replacement of HVAC systems every 10 to 15 years, though many systems can last at least 20 years. Still, when your HVAC system breaks, the HVAC installation cost can be high, plus it can cause your heating and cooling bills to skyrocket and your home to be an uncomfortable temperature until it’s replaced.

Replacing an HVAC system is expensive and necessary, but doesn’t have to be stressful if you take the time to learn the ins and outs of HVAC replacements, including the cost and how to finance it.

HVAC cost break down

You should expect to pay anywhere from $4,000 to $12,000 for an HVAC replacement cost. If you need ductwork replaced or installed, or you would like additional components, like air purifiers, dehumidifiers, smart thermostats and UV lamps, your HVAC system cost will likely be on the higher end of that range.

Factors of HVAC system costs

The range for HVAC system costs is broad because there are a wide variety of factors used to determine what your actual price will be. These factors include:

House size

The larger your home, the more square footage the HVAC system will need to heat or cool. The size of the unit installed is determined by the amount of square footage of your home, and if your home is large, you may need more than one HVAC unit to cover it.

Your home’s construction also plays a critical role in what HVAC system you need. If you have adequate insulation you may be able to get away with a unit that has less air conditioning and heating capacity. Improper insulation means that the HVAC system will need to work much harder to keep your home cooled or heated, and you may need a unit with more heating and cooling capacity.

Ductwork

If you’re replacing an HVAC system with ducts, it can be easy to overlook your ductwork because most people don’t fully understand its purpose and how it affects the HVAC system. To maximize the comfort and energy efficiency of your home, a duct system must be designed and installed by a professional, which is why you’ll need to know the cost to install an hvac system with ductwork. You may need the whole thing to be replaced, not just the unit.

It is possible the existing ductwork in your home will be sufficient for a new HVAC system. However, if your ductwork does need repair or replacement, you should expect to see some extra costs tacked onto the average cost to replace heating and air conditioning. New ductwork can cost up to $3,000 to install correctly.

Brand of HVAC unit

The brand of the HVAC system you select may have a significant impact on equipment cost, installation cost and warranty. Some of the most common HVAC system brands on the market today include:

  • Trane
  • Rheem
  • Amana
  • Lennox
  • Goodman

SEER value

SEER stands for Seasonal Energy Efficiency Ratio, which is the rating that results from the ratio used to measure a system’s energy efficiency. The higher the SEER rating, the more energy efficient the system will be and the more money you’ll save on utility bills each year. You’ll spend more on units with higher SEER ratings, though, and if you live in a moderate climate, it may not make financial sense to spend more on a system with a higher SEER rating.

Project difficulty

HVAC systems that are harder to access or older homes that require modifications or custom parts will likely result in higher HVAC replacement costs, so keep that in mind when you’re shopping for HVAC units for an older home.

Add-ons

When considering your options for a new HVAC system, you’ll be faced with a variety of optional upgrades or add-ons. Many HVAC companies offer things like dehumidifiers, air purifiers, zoning systems, smart thermostats, carbon monoxide alarms, UV lamps, ventilators and more. It is important to review the value and cost of each add on to determine if it is something your home needs.

Tips for saving on HVAC replacement

  • Find the right size for your home: Speak with more than one professional to help determine an adequately sized HVAC system for your home and needs. Make sure that your HVAC specialist recommends the purchase of a system big enough to meet your needs, but avoid spending the extra money to purchase one bigger than needed.
  • Get multiple quotes: It’s important to shop around and find an HVAC installer who is fair and upfront about price, but don’t just go for the cheapest. You’ll want the best work for the least money, not the least work for the least money. If you try to cut corners, you could be facing repairs well before you’re ready to.
  • Get referrals: Ask around for referrals and references. All companies are not equal, especially when it comes to the customer service they offer. If an HVAC company has a reputation for terrible customer service but offers you the lowest replacement cost, you may end up spending more in the long run due to the poor service.

HVAC financing options

Once you’ve determined who you want to hire to replace your HVAC system, it’s time to get down to business and determine how you will pay for the replacement. If you don’t have $4,000 to $12,000 in your bank account waiting to be spent, you’re not alone. There are plenty of HVAC financing options available to help you foot the cost of the bill.

Personal loan

If there is no equity in your home or you are looking for a loan with lower fees, a personal loan might be an option to fund your HVAC replacement. Most banks and lending institutions offer personal loans to people who have average or above-average credit. These loans typically have a higher interest rate than home equity loans, but a much lower rate than most credit cards. There are also personal loans available for people with less than perfect credit, though you can expect to pay a higher interest rate if your credit is rough and you need it for an HVAC loan. On the upside, personal loans usually offer quick access to funds, which is important if your HVAC system is not functioning correctly.

Home equity loan

A home equity loan is an option if you’ve built up equity in your home. Equity is the difference between what you owe on your mortgage and what the home is worth, and you can borrow against it in certain circumstances with a lump sum loan to fund things like HVAC replacements.

For example, if your home is worth $150,000 and you owe $100,000 on it, you have $50,000 in equity. Banks will allow you to borrow a percentage of that equity — usually up to 85%, but it can vary — and you can usually do so with low but variable interest rates and tax-deductible interest.

There may be closing costs and other fees to consider with this type of loan, though, and you’ll have to have equity to qualify. You will also be putting your home up as collateral, so if you don’t think you can pay it back, don’t do it. Still, this option can be a good way to finance an HVAC replacement if you don’t have the funds lying around.

Home equity line of credit

Similar to a home equity loan, a home equity line of credit (HELOC) allows you to borrow against the equity in your home, but rather than receiving a lump sum, a HELOC gives you access to a line of credit that you can borrow from repeatedly during the draw period. This may be a great option if you have several home improvement or maintenance projects in mind, or if you aren’t sure whether the HVAC replacement will require ductwork and don’t want to have to take out multiple loans to pay for it.

For example, if you are offered a HELOC with a $50,000 line of credit and spend $8,000 for an HVAC system replacement, you will have $42,000 left on your line of credit. As you pay back the $8,000 borrowed the money will be added back to your available credit. HELOCs usually offer a low interest rate, but the rate is often variable and can fluctuate. There may be fees associated with this type of loan, and as with home equity loans, your house will act as collateral.

In-house financing

Some HVAC companies offer special financing to customers who meet the requirements of the financing. This type of financing can sometimes be interest-free for a specific period of time before turning into a high interest loan. This type of financing can be a great option if you will be able to pay off the loan within the introductory period, but can be extremely costly if you let the loan age and become a high interest loan, so be careful with this type of funding. You could end up paying way more than you anticipated.