Editor’s note: Originally published December 2020. Reviewed and updated November 2026.
Tankless (on-demand) water heaters save space, supply continuous hot water, use less energy and can last much longer than tank models. The trade-offs are higher installation costs, limits on how much hot water they can deliver at once, and more maintenance. Here’s a closer look at each side to help you decide.
Quick answer
- Pros: compact wall mounting, endless hot water, a longer lifespan, lower energy use, and no risk of a tank flooding your home.
- Cons: higher upfront and installation costs, limited flow for high demand or cold climates, and regular flushing or descaling.
- Tank water heaters typically last about 8 to 10 years; tankless units can last about twice as long with good water quality and maintenance.
Pros of tankless water heaters
1. Space savings
The first thing you’ll notice is how small they are compared with a tank heater. They mount on a wall, indoors or outdoors, and can fit in closets and crawlspaces. An outdoor unit gives you back all the space the old tank used, which you can put toward storage.
2. Endless hot water
Hot water isn’t instant, because nothing is stored. But once heated water reaches the faucet or showerhead, it stays consistent. With no tank to run dry, two people can shower at the same time, or you can run the washing machine while someone showers, without racing the hot water.
3. Longer lifespan
A standard tank water heater lasts about 8 to 10 years. A tankless unit can last about twice as long, depending on water quality and maintenance. Replacing it less often helps offset the higher purchase price, and warranties are typically much longer too.
4. Energy and money savings
Tankless heaters only heat water when you need it, which is where the name “on-demand” comes from. You’re no longer paying to keep 40 or more gallons of water hot all day, every day. The U.S. Department of Energy explains the energy savings of demand-type water heaters in more detail.
5. Lower risk of water damage
When a tank water heater leaks or bursts, you can come home to a flooded floor, ruined flooring, mold and costly repairs. A tankless heater can still leak, but it can’t release a whole tank of water into your home.
Cons of tankless water heaters
1. Higher upfront costs
Switching to tankless usually costs more than replacing a tank heater like for like. The heater sometimes has to move to a new location, which means rerouting gas and water lines. The exhaust vent is also different, typically schedule 40 PVC or stainless steel.
These costs are normally recovered over time through better efficiency, lower energy use, water savings and a longer lifespan.
2. Limited hot water supply
A tankless heater can only deliver so many gallons per minute. Most models suit an average 2 to 3 bathroom home in a southern climate; in colder northern climates, where the incoming water is colder, they’re less effective.
Many models work with a standard 1/2-inch residential gas line, but larger, high-BTU units need a 3/4-inch line. Upgrading the gas line adds cost, which is why tankless systems can end up limited when demand is high.
3. More maintenance
Tankless heaters can need more upkeep than tank models. Depending on your water quality, the system may need regular flushing or descaling to remove mineral buildup, which adds to the cost of ownership.
Bottom line
A tankless water heater makes the most sense if you want to save space, never run out of hot water and are willing to pay more up front for lower running costs and a longer life. If your home has very high hot water demand, a cold climate or a small gas line, factor in the extra cost of a larger unit or gas upgrade. Ready to compare models? See our Takagi tankless water heater reviews and the Noritz NRC661-DV-NG review.
FAQ
How long does a tankless water heater last?
About twice as long as a tank heater’s 8 to 10 years, depending on water quality and maintenance.
Do tankless water heaters give instant hot water?
No. There’s still a wait for heated water to reach the tap, but once it arrives, the supply is continuous.
Do tankless water heaters need a bigger gas line?
Many work with a standard 1/2-inch line, but larger high-BTU models need a 3/4-inch gas line.
