Oil Furnace Buying Guide: How to Choose the Right Oil Furnace

Quick Answer: What Oil Furnace Should You Buy?

For most homeowners replacing an oil furnace, the best choice is a
properly sized, high-efficiency model from a manufacturer with
strong local service support.

As a general starting point, look for:

• 87% AFUE or higher for a current ENERGY STAR-qualified oil furnace
• A capacity determined by a professional heat-loss calculation
• A reliable and serviceable oil burner
• A blower appropriate for the home’s ductwork
• Easy access to filters and service components
• Compatible chimney or approved venting
• A safe and properly sized oil storage tank
• Local technicians familiar with the exact furnace
• Readily available replacement parts
• A warranty that covers the major components

Do not automatically buy the furnace with the highest AFUE or the largest
BTU rating. Installation quality, sizing, ductwork, combustion setup, and
maintenance can have a major effect on real-world performance.

How an Oil Furnace Works

An oil furnace burns heating oil to generate heat. The burner atomizes the
fuel and mixes it with combustion air. The resulting flame heats a heat
exchanger, while a blower moves household air across the heat exchanger.

The heated air is then distributed through the home’s ductwork.

The basic heating sequence is:

1. The thermostat calls for heat.
2. The furnace control system starts the heating sequence.
3. The oil burner receives fuel.
4. The ignition system starts combustion.
5. The burner heats the heat exchanger.
6. The blower circulates indoor air.
7. Warm air enters the rooms through supply registers.
8. The thermostat eventually satisfies the heating demand.
9. The burner shuts down.
10. The blower completes its required shutdown cycle.

Unlike a heat pump, an oil furnace produces heat by combustion rather than
transferring heat from outdoor air.

Is an Oil Furnace Right for Your Home?

Oil heating can make sense when natural gas is unavailable and a reliable
heating-oil supplier serves the property.

Oil May Be a Good Choice If:

• Your home already has an oil furnace and ductwork.
• Natural gas is unavailable.
• Heating-oil delivery is readily available.
• You need high heating output in a cold climate.
• You have adequate space for an oil tank.
• Local contractors specialize in oil heating.
• You want fuel stored on-site.

Consider Alternatives If:

• Electricity is relatively inexpensive in your area.
• You want to eliminate on-site fuel storage.
• You want heating and cooling from the same equipment.
• Your home is well suited to a cold-climate heat pump.
• Oil delivery is unreliable or expensive.
• There are few qualified oil-heating contractors near you.

Before replacing an existing oil furnace, compare the complete economics
of oil, heat pumps, propane, natural gas where available, and electric
resistance heating.

Understanding AFUE

AFUE stands for Annual Fuel Utilization Efficiency.
It measures how efficiently a furnace converts fuel energy into useful
space heat over the standardized annual rating procedure.

For example, an 87% AFUE furnace theoretically converts about 87% of its
fuel energy into useful space heating, with the remaining energy
representing losses under the rating methodology.

ENERGY STAR’s current oil-furnace criteria specify a minimum 87% AFUE.
1

AFUE does not tell you everything about a furnace. It does not, by itself,
tell you whether the furnace is properly sized, whether your ducts are
adequate, how reliable the burner will be, or how well the installation
was performed.

What AFUE Rating Should You Buy?

For most new oil-furnace installations, 87% AFUE or higher
is a sensible starting point.

Higher efficiency can reduce fuel consumption, but the additional
equipment and installation cost should be compared with the expected fuel
savings.

When Higher AFUE Makes More Sense

• You live in a cold climate.
• Your furnace operates for many months each year.
• Your home consumes a large amount of heating oil.
• You expect to remain in the house for many years.
• The higher-efficiency equipment has a reasonable price premium.

When the Payback May Be Less Attractive

• The house has a low heating demand.
• You rarely use the furnace.
• The efficiency upgrade is extremely expensive.
• You may sell the home soon.
• The higher-efficiency system requires expensive venting modifications.

ENERGY STAR states that certified oil furnaces can be up to 4% more
efficient than baseline models and estimates about $90 in annual energy
savings under its assumptions. Actual savings depend on fuel consumption,
climate, fuel prices, and the equipment being replaced. 2

How to Choose the Right Oil Furnace Size

Correct sizing is one of the most important parts of buying an oil
furnace.

Furnace size is normally expressed in BTU per hour. But the furnace’s
input rating and its useful heating output are not identical.

A contractor should determine the home’s heating requirement using a
recognized heat-loss calculation rather than simply multiplying square
footage by a generic BTU number.

Factors Used to Determine Furnace Size

• Home size
• Insulation levels
• Window efficiency
• Number and size of windows
• Exterior doors
• Ceiling height
• Basement configuration
• Air leakage
• Local climate
• Design outdoor temperature
• Duct losses
• Home additions

A furnace should be selected based on the home’s actual heat requirement,
not the capacity of the old furnace.

Why Oversizing an Oil Furnace Is a Problem

A common mistake is choosing a furnace that is substantially larger than
the home’s heat load.

An oversized furnace may satisfy the thermostat quickly and cycle on and
off frequently.

Potential consequences include:

• More frequent cycling
• Less even temperatures
• Reduced comfort
• Greater mechanical wear
• Potentially inefficient operation
• Difficulty achieving ideal airflow

Do not intentionally oversize an oil furnace simply because you want more
heating power during extreme weather.

The contractor should evaluate the home’s design heat load and the
equipment’s operating characteristics.

Oil Furnace Burners

The burner is a critical component because it controls how the heating oil
is mixed with combustion air and burned.

A good burner should provide reliable ignition, stable combustion, and
efficient operation when properly adjusted.

Ask the Installer:

• Which burner is included?
• Is it standard or upgraded?
• Can local technicians service it?
• Are replacement parts readily available?
• Which nozzles and filters are required?
• Is combustion testing included during installation?

A furnace with a sophisticated control system is not necessarily the best
choice if the nearest service company is unfamiliar with it.

Blower Motors and Airflow

The furnace blower distributes heat throughout the home. The blower
therefore has an important effect on comfort and electrical consumption.

Single-Speed Blower

A single-speed blower is relatively simple and can be inexpensive to
service.

Multi-Speed Blower

A multi-speed blower can provide more flexible airflow than a basic
single-speed design.

Variable-Speed Blower

Variable-speed technology can provide more sophisticated airflow control
and may improve comfort when properly matched to the heating and cooling
system.

However, blower technology cannot compensate for severely undersized
ducts or inadequate return-air capacity.

ENERGY STAR’s current furnace specification recognizes single-speed,
multi-speed, and modulating fan types among certified products. 3

Oil Furnace Configurations

Oil furnaces are available in different cabinet configurations. The right
configuration depends on where the furnace is installed and how the
existing ductwork is arranged.

Upflow

An upflow furnace generally takes return air from below or around the
furnace and sends heated air upward into the supply duct system.

Downflow

Downflow configurations can be useful in homes where the duct system is
arranged below the furnace.

Horizontal

Horizontal furnaces can be useful where the equipment must be installed
in a low-clearance or attic-style configuration.

Low-Boy and High-Boy

Oil furnaces are also commonly described by cabinet height. Low-boy
designs can be useful where ceiling height is limited, while high-boy
configurations can provide additional vertical space for installation
arrangements.

The installer should confirm that the selected cabinet physically fits
the mechanical space and works with the home’s duct layout.

Ductwork Compatibility

Buying an efficient furnace without evaluating the ductwork can result in
disappointing performance.

Your contractor should inspect:

• Supply ducts
• Return ducts
• Static pressure
• Filter size
• Register locations
• Duct leakage
• Insulation around ducts
• Airflow restrictions

ENERGY STAR specifically recommends home sealing and duct sealing as ways
to improve heating and cooling performance. 4

In an older house, spending money on duct improvements and air sealing may
sometimes provide greater value than paying for a small increase in
furnace AFUE.

Chimney and Venting Requirements

Oil furnaces produce combustion gases that must be safely exhausted from
the home.

When replacing an older furnace with a more efficient model, the existing
chimney may not automatically be suitable.

Higher-efficiency equipment can extract more heat from combustion gases,
potentially changing flue-gas temperatures and venting requirements.

Have the contractor inspect:

• Chimney condition
• Flue liner
• Draft
• Connector pipe
• Clearances
• Condensation risk
• Local code requirements

Never modify furnace venting based solely on online instructions. Venting
should be designed and installed according to the equipment
manufacturer’s requirements and applicable local codes.

Oil Storage Tanks

An oil furnace requires a reliable supply of heating oil, normally stored
in a residential oil tank.

Before installing a new furnace, inspect the existing tank rather than
automatically assuming it can remain in service.

Check for:

• Corrosion
• Rust
• Leaks
• Damaged supports
• Water contamination
• Deteriorated fuel lines
• Damaged fittings

Tank requirements vary by state, municipality, fire code, environmental
rules, and insurance requirements.

Heating Oil and Fuel Compatibility

Do not assume that every oil-burning appliance is compatible with every
liquid fuel.

Confirm the manufacturer’s specified fuel type before purchasing.

Fuel quality can also affect burner performance. Water, sediment, sludge,
or contamination in an oil tank can contribute to operational problems.

If your property is supplied by a local heating-oil company, ask about:

• Available fuel grades
• Delivery schedules
• Automatic delivery
• Emergency delivery
• Fuel additives
• Biofuel blends

Biodiesel and B20 Compatibility

Fuel flexibility is becoming a more relevant consideration for some oil
furnace buyers.

Current ENERGY STAR criteria require certified oil furnaces to meet the
applicable UL 727 B20 certification requirement. 5

This does not mean homeowners should simply pour any
biodiesel blend into any existing oil furnace.

Always verify:

• The furnace model
• The burner
• The approved fuel blend
• The nozzle
• Manufacturer instructions
• Warranty requirements

Fuel compatibility should be established before switching from conventional
heating oil.

Best Oil Furnace Brands

Several manufacturers have established themselves in the residential oil
heating market.

Brands homeowners may encounter include:

• Thermo Pride
• Williamson-Thermoflo
• Olsen
• Airco
• Other regional oil-heating manufacturers

Brand reputation is useful, but it should not be the only deciding factor.

For oil heating, local service support can be particularly
important. A furnace from a reputable manufacturer may be a poor
choice if no qualified technician near you regularly works on it.

Questions to Ask Local Installers

• Which oil furnace brands do you install most often?
• Which brands do you service?
• Which burners do you prefer?
• Which parts do you keep in stock?
• How quickly can you obtain replacement controls?
• Do you provide emergency winter service?

How Much Does an Oil Furnace Cost?

Oil furnace pricing varies significantly depending on furnace capacity,
efficiency, installation complexity, location, ductwork, chimney
modifications, and whether the oil tank needs replacement.

Rather than relying on a single national average, obtain itemized local
estimates.

The Quote May Include:

• Oil furnace
• Oil burner
• Thermostat
• Blower
• Installation labor
• Electrical work
• Vent connector
• Chimney work
• Oil filter
• Fuel-line work
• Air filter
• Old furnace removal
• Oil tank replacement
• Duct modifications

Two quotes with identical furnace models can have very different total
prices because the installation scope may differ.

Oil Furnace Installation

Installation quality is extremely important. A high-efficiency furnace
cannot deliver its expected performance if the burner, airflow, ductwork,
or venting is improperly configured.

A Good Installation Should Address:

• Correct furnace capacity
• Level and secure equipment installation
• Correct oil-line installation
• Proper burner setup
• Combustion testing
• Correct airflow
• Appropriate duct connections
• Correct venting
• Safe electrical connections
• Thermostat setup

Ask for combustion-test results and commissioning documentation after the
installation.

How Much Does It Cost to Run an Oil Furnace?

The annual operating cost depends primarily on the home’s heating demand,
furnace efficiency, heating-oil price, and climate.

A simple way to understand the relationship is:

More efficient furnace = less fuel required for the same amount of
useful heat.

For example, if a home requires 100 units of useful heat, a furnace with
higher AFUE requires less fuel input than a lower-efficiency furnace.

However, the actual annual savings depend on how much heat the house
requires.

Factors Affecting Oil Consumption

• Climate
• House size
• Insulation
• Air leakage
• Thermostat setting
• Furnace AFUE
• Furnace sizing
• Burner condition
• Duct losses
• Heating-oil price

ENERGY STAR notes that improving home sealing, insulation, and duct sealing
can improve heating performance alongside efficient furnace equipment.
6

Oil Furnace Maintenance

Oil furnaces require regular professional maintenance because combustion
performance directly affects efficiency, reliability, and safe operation.

Typical Maintenance Tasks

• Burner inspection
• Combustion testing
• Oil-filter inspection/replacement
• Nozzle service as required
• Ignition-system inspection
• Heat-exchanger inspection
• Blower inspection
• Air-filter replacement
• Fuel-line inspection
• Flue and vent inspection

Annual professional maintenance is a sensible strategy for many
oil-heating systems, especially before the heating season.

ENERGY STAR also recommends regular maintenance of heating and cooling
equipment to prevent unwanted operating problems and costs. 7

How Long Does an Oil Furnace Last?

A properly maintained oil furnace can provide many years of service, but
actual lifespan varies considerably.

Factors affecting longevity include:

• Maintenance frequency
• Burner condition
• Operating hours
• Fuel quality
• Installation quality
• Heat-exchanger condition
• Moisture and corrosion
• Ventilation and combustion conditions

Instead of replacing a furnace based solely on age, evaluate its
efficiency, repair history, heat exchanger, burner condition, and expected
future maintenance costs.

Oil Furnace Warranty

Compare warranties carefully because different components may have
different coverage periods.

Check Coverage for:

• Heat exchanger
• Burner
• Controls
• Blower motor
• Cabinet
• Other major components

Also determine whether registration is required and whether installation
must be performed by an authorized contractor.

A long parts warranty does not necessarily mean the entire repair is free.
Labor, diagnostic fees, refrigerant or fuel-system work, and other
expenses can be excluded.

Will an Oil Furnace Work During a Power Outage?

Normally, no.

Although the fuel is stored on-site, the furnace still needs electricity
for its controls, ignition system, burner, and blower.

If you live in an area with frequent winter power outages, consider a
properly installed standby generator or another appropriately designed
backup-power system.

This is especially important in cold climates where an extended outage
could result in frozen pipes and significant property damage.

Oil Furnace vs Heat Pump

A heat pump is one of the most important alternatives to consider before
replacing an oil furnace.

A heat pump can be particularly attractive if electricity is reasonably
priced and the home is well insulated.

A dual-fuel system can also combine a heat pump with combustion-based
backup heating.

Oil Furnace vs Gas Furnace

Natural gas can be attractive where pipeline service is available.

However, installing a gas furnace can require a gas connection or gas-line
extension that may not be economically practical in rural areas.

Oil heating can therefore remain competitive for homes that already have
an established oil tank and delivery infrastructure.

Oil Furnace vs Electric Furnace

Electric resistance furnaces avoid combustion and on-site fuel storage,
but their operating cost depends strongly on electricity prices.

If you’re considering switching away from oil, compare an electric furnace
with a heat pump rather than assuming resistance heating is the only
alternative.

A heat pump can deliver substantially more heat per unit of electricity
than electric resistance heating under appropriate operating conditions.

Oil Furnace Buying Checklist

Use this checklist when comparing quotes.

Common Oil Furnace Buying Mistakes

1. Choosing Based Only on Price

A cheap furnace can become expensive if it requires frequent repairs or
consumes substantially more fuel.

2. Choosing the Largest Model

Bigger is not automatically better. Furnace capacity should be based on
the home’s heat loss.

3. Focusing Only on AFUE

Efficiency is important, but installation quality and equipment
serviceability matter too.

4. Ignoring the Oil Tank

A new furnace does not fix an aging or leaking storage tank.

5. Ignoring the Chimney

A new high-efficiency furnace may require changes to the existing venting
arrangement.

6. Not Checking Local Service

Always determine who will service the equipment after installation.

7. Replacing Equipment Without Checking Ductwork

Poor airflow can undermine the performance of an otherwise excellent
furnace.

8. Assuming Biodiesel Compatibility

Verify the exact fuel specifications before using biodiesel or other
alternative fuel blends.

Frequently Asked Questions

What is the best oil furnace to buy?

The best oil furnace is one that is properly sized, efficient, reliable,
locally serviceable, and compatible with your home’s ductwork and venting.
There is no single model that is best for every U.S. home.

What is the best AFUE rating for an oil furnace?

For a new ENERGY STAR-qualified oil furnace, look for at least 87% AFUE.
Higher ratings can reduce fuel use, but the additional purchase and
installation cost should be evaluated for your particular home.
8

Is 87% AFUE good for an oil furnace?

Yes. 87% is the current ENERGY STAR threshold for residential oil
furnaces. 9

How do I know what size oil furnace I need?

Have a qualified contractor perform a heat-loss calculation. Do not choose
the new furnace simply because it has the same BTU rating as your old
furnace.

Should I buy a variable-speed oil furnace?

A variable-speed blower can improve airflow control and comfort in a
properly designed system. However, it is not automatically worth paying
substantially more if your ductwork or system design cannot take
advantage of the technology.

How often should an oil furnace be serviced?

Annual professional maintenance is a sensible practice for many oil
furnaces. Follow the manufacturer’s maintenance recommendations and have
combustion performance checked by a qualified technician.

Should I replace my oil tank when I replace my furnace?

Not necessarily. Have the existing tank professionally inspected. If it
shows significant corrosion, leakage, structural damage, or other safety
concerns, replacement may be appropriate.

Can an oil furnace heat a large house?

Yes. Oil furnaces are available in a range of capacities, but the correct
size should be determined from the home’s calculated heating load.

Can an oil furnace run during a power outage?

Not without electricity. The burner, controls, ignition system, and blower
require electrical power. A properly designed generator can provide backup
power.

Are oil furnaces good for cold climates?

Oil furnaces can provide high heat output and have historically been widely
used in cold regions. However, modern cold-climate heat pumps should also
be considered when comparing replacement options.

Can oil furnaces use biodiesel?

Some models support specific biodiesel blends. Current ENERGY STAR
requirements include certification to the applicable UL 727 B20
specification for certified oil furnaces. Always follow the manufacturer’s
fuel requirements. 10

How long does an oil furnace last?

Lifespan varies according to installation quality, maintenance, operating
hours, corrosion, burner condition, and other factors. A well-maintained
furnace can provide many years of service.

Is an oil furnace better than a heat pump?

Neither is universally better. Compare local electricity and heating-oil
prices, climate, insulation, installation cost, power reliability, and
whether you want to keep on-site fuel storage.

Should I buy an ENERGY STAR oil furnace?

ENERGY STAR certification provides a useful efficiency benchmark. Current
ENERGY STAR-certified oil furnaces must meet the program’s 87% AFUE
threshold and other requirements. 11

Bottom Line: How to Choose an Oil Furnace

Buying an oil furnace is a long-term heating decision, so focus on the
complete system rather than the furnace cabinet alone.

For most homeowners, the ideal starting point is a properly sized
oil furnace rated at 87% AFUE or higher, installed by a qualified
contractor who has experience with the equipment and can provide ongoing
service.

Before signing a contract, verify the:

1. Exact furnace model
2. AFUE rating
3. BTU input and output
4. Heat-loss calculation
5. Burner type
6. Blower configuration
7. Ductwork compatibility
8. Chimney and venting requirements
9. Oil tank condition
10. Fuel compatibility
11. Parts availability
12. Local service support
13. Warranty
14. Total installed price

The current ENERGY STAR specification provides a useful benchmark:
qualifying residential oil furnaces must achieve at least 87% AFUE and
meet additional performance requirements. 12

However, the highest AFUE number is not automatically the best investment.
A correctly sized furnace with excellent installation and dependable
service support can be a better long-term choice than a more expensive
model that is poorly matched to the home.

Finally, if you’re replacing an older oil furnace, don’t limit the
comparison to other oil furnaces. Compare the complete lifetime economics
of an oil furnace against a cold-climate heat pump or dual-fuel system.
The right choice depends on your climate, energy prices, home efficiency,
existing infrastructure, and how long you expect to remain in the home.