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Heat Pump vs. Furnace: What’s the Difference?



It’s important to ensure you have the right home heating system for your property. It needs to keep you warm, work efficiently and not cost too much. Two options are a furnace or a heat pump. Both heat your home, but they have significant differences.

It can be difficult to decide which system is right for your home. There are many factors to consider when deciding between the two. Location, efficiency and usage are a few important considerations. Understand the differences between the two systems and choose which one is right for you before winter weather starts to sink in later this year. 


What are the main differences between a heat pump and a furnace?

A heat pump and a furnace are two different home systems that work to heat your home. While they both achieve the same goal, their differences matter. It’s important to know the advantages and limitations of each system when deciding between the two. 

How they work

Heat pump systems use electricity to transfer heat from a cold space to a warm one. The system works like an A/C unit. While most people use a heat pump to warm a space, it can also cool spaces. In the winter, a heat pump takes air from outside and uses it to warm the home. In the summer, it removes heat from the inside and sends it out.

A furnace is a common home system that burns natural gas or oil as a heat source. The burning fuel creates warm air, then pumps that heat energy into the home. Furnaces can only heat the indoor air in a home. You may also need to install an air-conditioner unit if you have a furnace. Adding a furnace is easy if you already have an A/C system. They are compatible, so you won’t need a separate home system. 

How a furnace and heat pump work is an important factor to consider when choosing between the two. A furnace might be your best option if you already have access to natural gas or live in an area where natural gas is cheaper. You might want to choose a heat pump if natural gas is expensive or unavailable.

Energy efficiency

Furnaces have gotten a bad reputation for being inefficient over the years; however, recent technology has made new furnaces up to 95% more efficient

Heat pumps have the upper hand when it comes to efficiency. Because heat pumps transfer heat instead of generating it, they use less energy to operate. While they run on electricity, they can be up to 300% more efficient — meaning they transfer more energy into heat than they consume. This efficiency is true for heat pumps whether they are heating or cooling a home.

While it’s clear that a heat pump is more energy-efficient than a gas furnace, there is one caveat: A heat pump will lose its efficiency in colder climates. The heat pump will have to work harder to heat a home when the temperature drops too low, consuming more energy. So, a furnace could be the more efficient system if you live in a cold climate. 

Cold-weather effectiveness

Climate is an important factor in deciding between a furnace or a heat pump. As mentioned, a heat pump might not be the best option for a home in a cold climate because it takes heat from the outside air to warm the home. It will have to work harder if the air is too cold. 

A heat pump works well in mild climates, where outdoor temperatures don’t go below 30 to 40 degrees Fahrenheit. What’s more, a heat pump also works as a cooling system. A heat pump is perfect for heating and cooling if you live in a mild climate. 

A furnace burns fuel, generating heat even on the coldest days. So, a furnace is the best option if you live in an area with harsh winters. An oil or electric furnace will heat your house better than a heat pump, even if you don’t have easy access to natural gas. 

What is a dual fuel system?

If you happen to live in a mild climate but occasionally have bouts of freezing weather, there is a system that offers the best of both worlds. A dual fuel system pairs the efficiency of a heat pump with the heating abilities of a furnace. Pairing a gas furnace with an air-source heat pump allows you to use the heat pump during mild weather and switch to the furnace when temperatures plummet. 


Indoor and outdoor spaces are important factors when deciding between a furnace and a heat pump. Each system has different requirements that could limit your options. It’s important to consider your space when choosing a heating system.

Furnaces need around 30 inches of clearance on all sides and are the larger of the two options. They only need space inside. However, if you choose a furnace and central A/C system together, the A/C unit will need space outside. 

Heat pumps are smaller and only need around 24 inches of clearance on all sides. The key difference is a heat pump has an outdoor unit. Some air-source heat pumps might also require an indoor fan coil unit. 

A furnace might not be an option if you have a small home with limited indoor space. If your home has little to no outdoor space, a heat pump will not work. What’s more, both units must be accessible for homeowners and professionals to perform maintenance, change air filters and replace them if needed.

Air quality

Both a furnace and a heat pump will deliver similar air quality if homeowners conduct regular system maintenance and replace air filters. However, a heat pump might be a better option for air quality due to how the systems work. 

A furnace burns fuel to create heat, meaning there is potential for a carbon monoxide leak if the unit breaks. However, the potential for a leak is low if the furnace is in good working order and maintained. Because a heat pump uses electricity, you won’t have to worry about carbon monoxide. As a bonus, heat pumps use moisture to create hot air, so your home won’t be as dry in the winter months. 

Installation cost

A heat pump typically costs about $4,000 to install, compared to the average gas-furnace cost of around $4,500. The cost of installing a new heating system will depend on your home's compatibility, current system and other factors.

  • Type of heat pump. Different types of heat pumps have different requirements. For example, you must bury a geothermal heat pump underground, which costs extra.
  • Natural gas availability. If your home is not connected to natural gas, installing a natural gas furnace will cost more.
  • Current home HVAC systems. Adding a furnace could be cheaper than starting from scratch if you already have a central air-conditioning system because these systems are compatible.
  • High-efficiency brands. Certain types of furnaces cost more money upfront. While this could save money on operating costs, it is important to consider installation costs.
  • Adding ductwork. If your home does not have the proper HVAC ductwork for a furnace home system, this will add to the cost. 

Average life span

Like most home systems, the average life span depends on maintenance and usage. A heating system that is well maintained and used less will often last longer. A furnace is only needed for a few months a year when heating the home and can have a life span of 20 years.

A heat pump will not last as long as a furnace, maxing out at 15 years. A heat pump runs year-round because it heats and cools a home, which shortens the life span, even when well maintained. 


Cinch warranties cover heating systems, including ductwork

Cinch Home Services is here to help when home systems break down. The Cinch Built-in Systems plan covers heating systems, including ductwork, for all of your heating needs. It helps keep homeowners warm, even in the dead of winter. 

Cinch is the second-largest U.S. provider of home protection plans, and it has an excellent Better Business Bureau rating. Join the nearly 1 million customers who trust Cinch with their homes. Get a quote today.


Wondering what the difference is between a heat pump and a furnace? Which is more efficient? How do they work? Cinch has what you need to know.