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Is It Worth Buying A House With Oil Heat

Hey there! So you’ve found your dream home, but there’s just one thing giving you pause – it has an old oil heating system. If you’ve never lived in a house warmed by oil before, it’s normal to have some reservations. Oil heat does come with its own unique pros and cons compared to other heating methods.

In this article, we’ll walk through everything you need to know about oil heating systems to help you decide if it’s the right fit for your new home. I’ll explain how oil heat works, the costs involved, maintenance needs, and more. I aim to provide an unbiased look at the key factors so you can make an informed decision. While oil heat isn’t for everyone, it can be a smart choice in many situations. Let’s dive in!

How Oil Heating Systems Work

To start, it helps to understand what exactly an oil heating system is and how it functions to warm your home. The main components include an oil tank, a fuel pump, a filter, a combustion chamber, and a heat exchanger.

The oil tank stores the heating oil, which is delivered by truck and pumped into the tank through a pipe. When the thermostat signals that heat is needed, the fuel pump draws oil from the tank and pushes it through a filter to remove any debris before sending it to the combustion chamber.

Inside the combustion chamber, the oil is ignited into a controlled burn, turning it into hot gases. Those gases pass through a heat exchanger, which transfers their heat into the air flow for hot air furnaces, or into water for boiler systems. The now-warmed air or water circulates through the home via vents or radiators to raise the interior temperature.

Pretty straightforward right? Now let’s look at the main pros and cons of buying a home with an oil heating system.

Pros of Buying a Home with Oil Heat

It Can Be More Affordable Than Electric Heat

For many homes, especially larger ones, heating oil can be a more cost-effective option compared to electric heat. On average, heating oil costs between 2.5 to 5.5 times less per BTU than heating with electricity. The price per gallon of heating oil tends to stay lower thanks to competition between suppliers.

Of course, your actual heating costs will depend on factors like your climate, the size of your home, and your conservation habits. But in general, the greater efficiency of heating oil compared to electric heat makes it a budget-friendly choice.

Oil Heat Is Available Almost Anywhere

Unlike natural gas, which requires access to utility pipelines, heating oil can be delivered to just about any location. This makes it the go-to choice for many rural or remote homes that aren’t on the gas grid. Even if you live far from the nearest town or buried in snow during winter, you can rest assured your heating oil will arrive when you need it.

It Provides Plenty of Heat

When it comes to efficiency, heating oil has an impressive 95% AFUE (Annual Fuel Utilization Efficiency) rating. This means about 95% of the fuel is converted into usable heat. The hot-burning oil warms up quickly, while wasting less.

Upgrading to a high-efficiency, Energy Star certified oil furnace or boiler can maximize savings. This kind of efficiency means you get more heat while spending less on fuel oil over the course of a winter.

Oil Heat Is Considered Safe

Some people worry that heating oil could be a fire hazard, but rest assured oil furnaces are designed to be safe. The oil combusts inside a controlled chamber and the fumes are non-toxic. There’s no risk of a leak causing an explosion. As long as your furnace is properly maintained, oil heating poses no safety issues.

You Can Stockpile Fuel in Your Tank

Having an ample oil tank on site means you can buy heating oil at the best time of year and stock up so you’re never left in the cold. Oil delivery services are less prone to disruption from storms or high demand than electric or gas companies. With your own fuel tank, you have peace of mind knowing warmth is always close at hand.

Cons of Buying a Home with Oil Heat

Now that we’ve looked at some of the benefits, let’s balance it out with the potential downsides:

It Can Be More Expensive Than Natural Gas

While oil heat is cheaper than electric, it does tend to be more expensive than natural gas heating. Heating oil prices are subject to global supply and demand. Over the past decade, the average price of heating oil was about $1-2 more per gallon compared to natural gas.

The size of your home and your climate will impact just how much more oil heat may cost you. For some homeowners, the higher fuel cost is worth it for the other perks that come with oil heat. But for others, the savings of natural gas make more sense.

Oil Is Non-Renewable and Has Environmental Impacts

Heating oil is a fossil fuel, and like all fossil fuels, it has environmental drawbacks. Burning oil does release emissions like carbon dioxide, even if modern furnaces burn cleaner than in the past. There are also environmental impacts from extracting and transporting oil that can’t be overlooked.

While no heating fuel is 100% clean, natural gas emits less CO2 and is seen as the most eco-friendly of the fossil fuels. If reducing your carbon footprint is important, oil heat may not align with your values.

Repairs Can Be Expensive

Because oil furnaces contain more moving parts, they’re generally more prone to breaking down than simpler systems like electric heaters. Repairing or replacing an oil furnace or boiler can cost several thousand dollars.

The older your oil heating system is, the higher the chances of expensive repairs down the line. Make sure to find out the age of the unit before buying an oil-heated home.

Maintenance Is Crucial

Speaking of repairs, preventing them means staying on top of maintenance like annual professional cleanings. Oil heating systems require more regular upkeep than other types. Expect to replace filters, clear debris, check connections, lubricate parts, and more.

Ignoring maintenance needs often leads to problems. If the previous homeowners didn’t take good care of the oil furnace, you could be inheriting issues.

Choosing Between Limited Suppliers

In any given area, there will be fewer companies supplying heating oil compared to the number offering natural gas, propane, or electric service. Having fewer suppliers means less competitive pricing.

On the other hand, some prefer doing business with a local oil company they build a relationship with over impersonal utility companies. This one’s a matter of personal preference!

No Heat During Power Outages

One advantage of natural gas is that it will continue heating your home during power outages. Oil heating relies on electricity to run the furnace. If you lose power, you’ll have no heat until electricity is restored.

For some homeowners, this is a dealbreaker. Others don’t mind firing up the fireplace or bundling up with blankets when the power goes out. It’s not ideal, but manageable for short outages.

Key Factors to Research Before Buying an Oil-Heated Home

Okay, so now you have a general overview of how oil heat works and the main pros and cons. But what else should you research before committing to a home with an oil furnace?

Here are some important things to look into:

  • The age and condition of the oil tank: Old tanks leak, so find out how old it is and check for corrosion or rust. Ideally, verify it’s less than 10 years old. If it’s nearing the 20-25 year mark, try to negotiate a new tank into the purchase agreement.
  • Service records for the oil furnace/boiler: Review maintenance logs to ensure regular upkeep was performed. Look into the unit’s age and whether any parts were repaired or replaced recently.
  • Average heating oil prices in your region: This will give you an idea of the per gallon fuel costs you can expect. Get quotes from local suppliers.
  • The AFUE efficiency rating: Look for ratings of at least 87% for hot air furnaces and 90% for hot water boilers. Higher is better!
  • Insulation levels, windows, other efficiency factors: An energy audit will reveal where heat may be leaking so you can budget for upgrades.
  • Quotes for converting to natural gas/electric: Understand your options in case you decide oil heat isn’t for you long-term. Converting costs $5-10k on average.

Doing this due diligence lets you make the most informed decision on whether to proceed or walk away.

Estimated Operating Costs of Heating Oil

One of the biggest factors in deciding whether to buy a home with oil heat is determining what it will cost to operate. The price you’ll pay to stay warm in winter depends on three key factors:

1. Outdoor temperature – The colder it is outdoors, the more heat will be required and the more oil you’ll burn. In milder climates, costs are lower. The average home uses around 600 gallons of heating oil per year. But in frigid northern states where temperatures drop below freezing for months, it’s not uncommon for homes to need 1000 gallons or more.

2. Thermostat settings – Where you set your thermostat makes a difference. Every degree higher increases oil consumption by 3-5%. Keep your home cooler when away or sleeping and utilize programmable thermostats to maximize savings.

3. Insulation – Poor insulation equals wasted money. Heat leaking out forces the furnace to work harder. Improve insulation in attics, basements and walls to boost efficiency.

To compare, the average household pays:

  • $900 – $1200 to heat with natural gas
  • $1200 – $2200 for heating oil
  • $1200 – $1600 for electric heat

In milder climates like the South, gas and oil cost closer to the same amount. But in the Northeast where winters are harsh, oil can cost up to double for the same home. When getting quotes, look at the home’s expected consumption in gallons rather than just the price per gallon to make an equal comparison.

Here’s a rule of thumb on oil usage at different temperatures:

  • At 50°F expect to use 2 gallons of oil per day
  • At 30°F usage jumps to 5 gallons per day
  • At 10°F plan for 8 gallons per day

Keep the tank at least 25% full at all times – don’t let it drop near empty before calling for a delivery. This avoids running out of oil mid-winter. Monitor your fuel gauge and order more oil once the tank hits 1/4 left.

Maintaining an Oil Heating System

To keep your oil furnace or boiler running efficiently for years to come, maintenance is key. Plan to have a professional service the unit at least once before each heating season. They’ll perform critical tasks like:

  • Replacing the oil nozzle, oil filter, and air filter
  • Cleaning the combustion chamber and testing the burner
  • Inspecting ignition components and checking all connections
  • Lubricating necessary parts
  • Evaluating airflow and venting

A well-maintained oil furnace can achieve 20+ years of reliable service. But skip just one or two annual cleanings, and expensive issues can develop. Look for a qualified HVAC pro with expertise in oil heat.

In between annual maintenance, you should also:

  • Check supply and return pipes for warmth, which can indicate leaks
  • Make sure ventilation cutouts aren’t obstructed
  • Clear debris around outdoor tanks

And keep an eye out for these warning signs:

  • Increased soot around the furnace
  • Strange odors or fumes
  • Higher fuel consumption
  • Soot marks near vents and radiators
  • Noisy operation or rumbling

Catching problems quickly prevents bigger headaches down the road. With proper maintenance, an oil heating system will safely and affordably keep you warm through winter.


By now you should have a solid grasp of what oil heat entails. You know how it works, what it costs, maintenance involved, and factors to consider before buying an oil-heated home.

While no heating system is perfect across the board, oil heat offers unique benefits many homeowners appreciate. For rural homes, its availability makes it the only viable option outside of expensive propane. The ample heat output and storage capacity of oil tanks make it a good match for larger, drafty old houses. And upgraded high-efficiency oil furnaces can operate with minimal fuss for decades when properly maintained.

Of course, higher fuel costs and environmental concerns do make other heating systems like natural gas preferable for some buyers. Do your research on average oil and gas prices in your area. And get an energy audit on any home you’re serious about to see where insulation improvements could optimize efficiency.

I hope this overview gives you confidence to make the right call for your needs. Reach out to local oil heat specialists for advice tailored to you. With some thoughtful planning, you can comfortably heat your new home while saving money and staying warm all winter long. Enjoy the journey of finding your dream home!

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