Tankless vs. Tank Water Heater: Which One is Right For Me?

About 20% of your household budget goes to heating water. The only thing more expensive is the heating and cooling of your home. With so much of your budget going toward heating water, it’s important to buy the right water heater for your home. 

Are you tired of showering in lukewarm or downright cold showers? You’ve tried everything and determined that it’s time to buy a new water heater. 

You have one main choice to make, tankless vs. tank water heater. Not sure what the difference is beyond the obvious?

Use our guide to help you decide which one is right for your home. 

What Are Tank Water Heaters 

This is the type of water heater that you will find in most homes today. You will recognize them by the large water holding tank. Most will hold 30 to 50 gallons of hot water. 

There is a pipe that comes out of the top to feed the hot water into your home’s plumbing when you turn on the hot water. They will use electricity or gas to power the heating mechanism inside the tank. 

You will also find a pressure release valve that helps regulate both the pressure and the temperature. You can adjust this by changing the preset settings. 


If your home utilizes natural gas than you can expect to use about 50% less energy than the electrically powered models. If you have a limited budget, then a tank water heater is a good choice. 

They have a lower purchase price than the tankless options. You can get a decent quality heater for $500 to $800. 

You will also find that repairs and maintenance are cheaper with these heaters. That is because their technology is simpler. This simpler technology also means installation is easier and faster. 


Have you ever been the last one in the house to take a shower only to find that you are now taking a cold shower? Welcome to life with a tank water heater. It takes time to heat up the water, so you’ll need to wait a while for the tank to refill and heat before you can take a hot shower. 

Tanked water heaters are not the most efficient option. Because they store the heated water, they have to constantly heat and reheat the water so that it is always ready. 

This means that it is working all the time even if you aren’t using hot water. Why would you want to pay for something that you aren’t using? 

While these tanks can last 10 to 15 years, that isn’t as long as tankless water heaters. That means you’ll be doing this dance again sooner rather than later. 

Let’s not forget the most obvious drawback, space. You need to have space in your garage or inside your home to house a 30 to 50-gallon tank of water. You cannot install it outside like you could a tankless heater. 

What Are Tankless Water Heaters 

These water heaters are often referred to as “on demand” water heaters. They use a series of high powered burners to heat the water rapidly. 

By the time the water leaves the coiled heat exchanger, it is hot and ready for use. Then the water gets transported directly to the faucet. 

There is no tank to store the heated water in. Usually, gas or electric is used to power these water heaters. Find out more here about installing your own tankless water heater. 


The biggest advantage is that tankless water heaters are about 22% more efficient than their tanked counterparts. They also last longer than tanked water heaters. 

You can expect to get over 20 years of useful life out of your tankless version. This will save you money in the long run by not having to replace your water heater anytime soon. You also have the ability to save up to $1,800 over this lifetime. 

There is no more fighting over who gets to shower first with a tankless heater. The process of speed heating the water means that you essentially have an endless supply of hot water. 

You also have a lot more freedom of where you can install your heater. So if you are limited on space, this is a huge advantage. 


Prepare to spend more on your tankless water heater for the initial purchase. So consider your budget for purchasing before you decide tankless is right for you.

Plan to spend a couple of thousand dollars on a new water heater. The installation will also be expensive if you are going from tank to tankless. Your plumber will have to retrofit your tank to the old pipe setup. 

While you technically have an unlimited supply of hot water, don’t try to do too much at one time. That means no washing laundry while also taking a shower. 

The same goes for two people showering at the same time. One person is going to have a chilly experience. 

Tankless vs. Tank Water Heater, Time to Decide 

You should now have a good idea which one you will choose in the tankless vs. tank water heater debate. If you don’t use a lot of hot water and have space in your home, then a tank water heater will work fine. 

If your family uses a lot of hot water or you are limited on space, then a tankless water heater fits your needs better. Consider your budget, water consumption, and space in your home when you make your final decision. 

Be sure to follow these 4 DIY steps to maintaining your water heater.