HVAC Financing

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How much would you like to borrow for upgrading your HVAC?

by | Apr 2, 2021

HVAC Financing

These days, families are spending more time in their homes, and comfort has become a top priority. Controlling the temperature in your home through a heating, ventilation, and air conditioning (HVAC) system could prove to be very beneficial to your family’s comfort and well-being.


Why replace your HVAC system?


A new HVAC system may be beneficial if you are looking to sell your home and would like to increase the value before putting it on the market. A new HVAC system may also benefit a new family with different needs, by adding precise temperature control or better air filtration. HVAC systems offer many benefits beyond heating and cooling as well. For example, maybe you live in a humid climate but prefer it to be more arid, an HVAC system with humidity control could ease your situation.


How much do new HVAC systems cost?


Types of HVAC Units

There are four main types of HVAC units, each with its own benefits so you can choose the best fit for you depending on your needs. The four main types of HVAC units are split systems, hybrid systems, duct-free systems, and packaged heating and air systems. Prices vary depending on the type, installation, and brand.

  1. The most popular HVAC systems are heating and cooling split systems. This system is split between a heating unit and a cooling unit. This type of HVAC system has a cooling unit outside the home and a heating unit inside, typically in a basement, garage, or storage space. This system uses a traditional thermostat so that you are in control of the home’s desired temperature.
  2. A hybrid HVAC system is very similar to a split system with a couple of key differences. The popularity of these systems is rising due to their ability to mitigate energy costs. The main difference is that the owner can choose to switch from gas power to electric power. This type of system is better suited toward more temperate climates where electric power is enough to sustain your desired indoor temperature.
  3. A duct-free HVAC system is like a split system but instead of heating/cooling an entire home or building at once, it works per room. This type of system is more costly because a unit needs to be installed outside every room. A duct-free HVAC system is best suited for schools, hotels, and apartment buildings.
  4. Packaged heating and air systems are not as common as split systems but could be beneficial depending on your needs. The entire unit can be stored within the home, typically in an attic or rafter space. These units work best in smaller homes because the compact size of the unit offers less power. These units would also be the most beneficial in warmer climates due to power difference needs to heat vs. cool the home.


Average Price

The average cost to replace an HVAC system is $7,000, with a typical range of $5,000 to $12,500. Depending on brand and size, this can translate into $25 to $60 per square foot. This includes the new unit and installation, and the removal of the old unit.

The price of a new HVAC system ranges from $1,000 to $12,500, depending on size and brand. An energy efficient HVAC system could cost up to 20 percent more than a traditional one, depending on the brand. While an energy efficient HVAC system may cost more, it could end up saving you money on utility bills.



Price Range


$1,000 – $5,000


$1,500 – $4,000


$1,500 – $4,500


$1,500 – $5,000


$2,000 – $5,000


$2,000 – $7,000


$2,000 – $10,000

American Standard

$2,500 – $5,000


$2,500 – $6,000

Magic Pak

$3,500 – $6,000


$5,000 – $10,000


Keep in mind that these are typical price ranges from each brand and they may vary by location and by the installer.These are the price ranges for the HVAC system alone and do not include labor costs of installation of a new system or removal of an old system. Cost of labor is something important to keep in mind as you are deciding which HVAC system is right for you. As the different HVAC systems have different needs, the price of labor will vary for which one you choose and the location of your home. It is also advised that you do not take on an HVAC system replacement as a DIY project as incorrect installation can cost thousands in damages.


Options for HVAC Financing


1. Personal Loan

A personal loan can be a good option when you are not liquid enough to pay for a project in cash or do not yet have enough equity in your home to leverage for a new HVAC system. A personal loan is a type of installment loan. This type of loan is typically paid back in 12-84 months so it can offer a lot of flexibility. A personal loan can be a good option for someone with good credit or a good relationship with their bank or credit union. This type of loan does not require that you put anything up as collateral so you do not need to worry about a lien on your home as long as you make your payments. Interest rates for personal loans can be lower than those for credit cards or other types of loans. Interest rates for personal loans can range from 5 to 32 percent depending on credit and loan length, while credit card interest typically averages 18 percent. Generally, the better credit you have the lower the interest rate will be. One thing to keep in mind with personal loans is that the better your credit, the lower your interest rates will be.

Prepayment penalties: Some lenders don’t charge prepayment penalties, meaning you can pay off your loan early and decrease the amount you pay in interest.


2. Home Equity Loan

A home equity loan can be considered a second mortgage. A home equity loan allows you to borrow a lump sum of money using the equity you have built in your home. A typical repayment for a home equity loan is between 5 and 30 years.

You can calculate your home’s “loan to value” ratio by dividing the amount you owe by the value of your home. For example, you owe $150,000 on a home worth $300,000. That’s $150,00/$300,000 = 0.5 or 50 percent loan to value. This means that you have 50% equity in your home. After calculating your home equity, compare it to your lenders maximum LTV ratio to see if you quality for a home equity loan. After confirming that you may qualify for a home equity loan you can calculate how much you may borrow by multiplying the value of your home by the maximum LTV of the lender and subtracting your mortgage balance.


Pros & Cons

Home equity loans are great for people who want to fund home improvement projects because the interest you pay will be tax deductible if the money is used for renovations, according to BankRate.


Home equity loans offer competitive interest rates when compared to other options.




Low interest rates

Closing costs can be expensive


Fixed monthly payments

For those who want to pay it off fast, they have longer funding timeline than personal loans

Interest may be tax deductible

Risk of losing your home if you are unable to make payments


Home Equity Loan vs. Home Equity Line of Credit (HELOC)

Both home equity loans and HELOCs are secured against the value of your home equity. However, a home equity loan is a lump sum of money and a HELOC is a revolving line of credit, similar to a credit card.


A HELOC may be harder to secure than a personal loan or home equity loan therefore you need good credit and a high LTV ratio.


3. Credit Cards


Credit cards are always an option for financing home improvement projects. However, credit cards are likely to be the most costly option when financing an HVAC system replacement. Moreover, the interest rates will likely be higher with credit cards, making them harder to pay off over time. Credit cards can be obtained regardless of credit issues and therefore can be the most flexible option for a broader range of credit histories.


Top Reasons for a HVAC System Replacement


Upgrading your HVAC

In 2019 the top two reasons homeowners decided to replace their HVAC system were to improve energy efficiency and to upgrade worn-out surfaces, finishes, and materials, as noted by the National Association of Realtors (NAR). Moreover, 46% of homeowners reported better functionality and livability with their new installation.


Increase the home resale value

According to the NAR, HVAC system replacement ranked third when asked which home improvement projects are most important to buyers. HVAC system replacement also ranked third in terms of expected value at resale. On average, 20% of realtors suggest an HVAC system replacement before putting your home on the market.


Other factors to consider:


Home and Environment

Not all homes have the same HVAC needs. When choosing a system for your home, consider the size of your home and the climate where you live. If you live in a hot, arid location then you might want to focus on an HVAC system that has efficient air conditioning and humidity control. If you live in a location where there are more winter months than summer you might want to focus on the heating aspect of your HVAC system.



There are many different types of HVAC systems to consider before investing. Depending on your family’s needs you might be looking for a larger system or a more compact one. Maybe energy efficiency is a top priority for you. Whatever the case may be, shop around for different types before committing to your new HVAC system.


Zoned Systems

Most HVAC systems heat/cool the entire house at once. However, zoned systems allow you to choose which parts of your home the air reaches. If you live in a large home or a home where there are different climate needs then a zoned system could be a good option for you.


Humidity Control

An HVAC system with humidity control could be a good option for you if you live in a very arid or very humid climate. This typically comes as an upgrade to a traditional HVAC system.


Would a new HVAC system increase the value of your home?


Average ROI for a new HVAC system

The price of a new HVAC system might seem daunting but it is probably worth it, especially if you are thinking of selling your house in the near future. Moreover, an HVAC system replacement offers a high ROI compared to other home improvement projects. According to a 2019 Remodeling Impact Report conducted by the NAR, homeowners are able to recover 85% value from a new HVAC system. Therefore, if you invest $7,000 into an HVAC system replacement the cost recovered would be $5,950.



Is it really worth it?

An upgrade to your HVAC system is almost always worth the price. If you are thinking of putting your home on the market soon, a new HVAC system is a good selling point for potential buyers. If you are a homeowner looking to upgrade your current HVAC system, it is an investment that could improve the comfort of your home and your family.











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Customer Testimonial

Excellent experience

Process was very easy and the customer service agent that I spoke with was very friendly. Once the loan was under review and I was contracted, I knew in 2 mins whether I was approved.

Very easy and fast

Very easy and fast approval time.

Very thankful

Very thankful there are financing options for tiny homes. The process was extremely easy with Loan glide and the staff was very attentive.

Don’t sweat your HVAC issues! There’s financing for that!