Your furnace just broke down in the middle of a Canadian winter — now you’re facing a big decision: repair it or replace it? It’s one of the most common questions Ontario homeowners ask us, and the answer depends on several key factors.

The 50% Rule

The industry standard: if the repair cost is more than 50% of the cost of a new furnace, replace it. A new mid-efficiency furnace runs $3,499–$5,000 installed — so if you’re looking at a $2,000+ repair bill, replacement almost always makes more financial sense.

Age of Your Furnace

Furnaces have a typical lifespan of 15–20 years. If your unit is:

• Under 10 years: Repair is almost always the right call
• 10–15 years: Evaluate the repair cost carefully
• Over 15 years: Replacement is usually smarter — parts are harder to find, efficiency has dropped, and breakdowns will become more frequent

Efficiency — The Hidden Cost

Old furnaces from the 1990s and early 2000s typically run at 60–80% AFUE efficiency. Modern high-efficiency furnaces reach 96–98% AFUE. On a $2,400/year gas bill, that efficiency gap costs you $480–$960 per year in wasted energy. A new furnace can pay for itself in savings within 5–7 years.

Signs You Should Replace Immediately

• Cracked heat exchanger (safety hazard — CO risk)
• Furnace cycles on and off repeatedly (short cycling)
• Uneven heating throughout your home
• Increasing gas bills despite normal use
• Yellow or flickering pilot light (should be blue)
• Excessive dust, soot or rust around unit

When to Repair Instead

• Furnace is under 10 years old
• Repair cost is under 30% of replacement cost
• Unit is still under manufacturer warranty
• Only one component has failed (igniter, capacitor, blower motor)

Ontario Rebates Can Change the Math

If you’re replacing a gas furnace with a high-efficiency heat pump, you may qualify for up to $6,500 in Enbridge HER+ rebates. This can dramatically reduce the out-of-pocket cost of upgrading — sometimes making a new heat pump system cheaper than repairing an old furnace.