Water Heater Replacement Cost in Ontario (2025 Guide)

Replacing a water heater is one of the most common home upgrades in Ontario, especially as older tanks approach the 10-12 year mark or begin showing signs of wear. Whether you’re dealing with inconsistent hot water, rising energy bills, or a tank that’s leaking or failing, understanding the true replacement cost is essential before choosing your next system. 

This 2025 guide breaks down everything you need to know from average Ontario pricing and installation requirements to tank vs. tankless costs, rental vs. buy decisions, and long-term considerations. 

Average Water Heater Replacement Cost in Ontario (2025) 

For most Ontario homeowners, replacing a water heater in 2025 costs: 

The total you pay depends on the model, efficiency levels, installation conditions, and whether your home requires venting, electrical, or gas upgrades. 

Homeowners replacing a basic 40–50 gallon tank usually fall on the lower end of the range, while larger homes or those switching to tankless systems may experience higher costs due to more complex installation work. 

Costs by Water Heater Type 

Electric Tank Water Heaters 

Electric tanks remain the most budget-friendly option to replace, typically ranging from $1,500 to $2,200 installed. These units are ideal for smaller homes, condos, and townhouses but are generally more expensive to operate in Ontario due to electricity rates. 

If you’re exploring rentals, here’s our water heater collection: 
View Hot Water Tanks (Rent or Buy) 

Gas Tank Water Heaters 

The most common option in Ontario homes, gas tanks usually cost $1,800 to $2,800 installed. They provide faster recovery times and lower monthly utility bills, making them ideal for families who rely heavily on hot water. 

If you need installation help: 
Water Heater Installation Services 

Tankless Water Heaters (Hot Water on Demand) 

Tankless systems also referred to as hot water on demand—have become increasingly popular due to their ability to deliver endless hot water while taking up minimal space. However, they are also the most complex to install, often requiring new venting, upgraded gas lines, and additional labor. A typical tankless replacement ranges from $3,500 to $6,500, depending on whether it is a condensing or non-condensing model and where it will be mounted in your home. 

Learn more about tankless installation options here: 
Tankless Water Heater Installation 

What’s Included in a Proper Replacement? 

A complete, code-compliant replacement from a licensed Ontario technician typically includes: 

• Safe removal & disposal of the old unit 
• Delivery and installation of the new water heater 
• Connection to gas or electrical supply 
• Updated venting (if required) 
• Testing for leaks, carbon monoxide, and system safety 
• System startup and warranty activation 

A quick, low-cost installation may skip required safety steps which can lead to higher long-term issues. 

Should Ontario Homeowners Rent or Buy a Water Heater? 

This is one of the most common questions Ontario homeowners ask, especially during replacements. Both renting and buying have advantages, and the right choice depends on your budget and long-term plans. 

Buying A Water Heater

Buying a water heater means you pay more upfront but typically save more over time, especially if you plan to stay in your home for many years. Ownership allows you to choose any model you prefer and avoid long-term rental fees. However, when you purchase a unit, repairs and replacements become your responsibility once the warranty expires. 

Renting A Water Heater

Renting a water heater is appealing because there is no upfront cost, and all repairs, service, and future replacements are included at no extra charge. This gives you predictable monthly payments and peace of mind, particularly if you don’t want to deal with unexpected repair bills. In Ontario, rental plans for tank systems usually start between $22 and $55 per month, while tankless systems typically range from $40 to $69 per month. 

If you’re considering renting, explore Go Lime’s rental options: 
Hot Water Tank Rentals in Ontario 

Factors That Influence Replacement Cost 

Several variables impact what you’ll pay: 

• System Size: Larger households often require 50–60 gallon tanks or higher BTU tankless models. 
• Fuel Type: Gas systems require venting and gas lines that meet TSSA code. 
• Efficiency Rating: High-efficiency models cost more upfront but can reduce utility bills. 
• Installation Requirements: Homes may require venting updates, electrical changes, slope correction, gas line upgrades, or new shutoff valves — all of which affect cost. 
• Brand & Warranty: Premium units often include longer warranties, durability improvements, and advanced controls. 

How Much Does It Cost to Upgrade to Tankless? 

Upgrading to tankless hot water is common in Ontario homes with growing families or finished basements. The price is higher because installers often need to: 

• Upsize the gas line 
• Install high-efficiency venting 
• Mount the system on the wall 
• Run condensate drainage for condensing models 

Still, tankless systems last up to 20 years, deliver endless hot water, and often reduce long-term energy consumption. 

If you’re exploring tankless rentals or purchases: 
Browse Tankless Systems 

When Should You Replace Your Water Heater? 

Most water heaters give noticeable signs before they fail completely. If you start experiencing inconsistent temperatures, rusty or discolored water, rumbling sounds, or leaks around the base of the tank, it may be time for a replacement. Standard tank water heaters generally last 8 to 12 years, while tankless units can last up to two decades with proper maintenance. 

Ontario’s hard water conditions can shorten the lifespan of a tank, particularly if sediment builds up inside. Regular maintenance can delay replacement, but once corrosion or leaks appear, replacing the unit is usually the safest and most cost-effective choice. 

What Should You Budget for a Water Heater Replacement in 2025? 

Most Ontario households should expect to budget: 

• $1,800 – $4,500 for a standard tank replacement 
• $3,500 – $6,500 for a tankless system upgrade 

Renting remains a strong option if you want predictable monthly costs and full coverage for repairs and maintenance.  

Whether you decide to rent or buy, choosing a licensed, reputable installer ensures the job is completed safely and in compliance with Ontario’s gas and electrical standards. A properly installed water heater will run more efficiently, last longer, and deliver consistent hot water when you need it most. 

Need Help Choosing a Water Heater? 

If you’re unsure whether to repair, replace, rent, or upgrade to tankless, our team can walk you through options based on your home size, usage, and budget. 

Book your free consultation and explore smarter water heating today.