The rule, in short
Replace if water is coming from the base of the tank itself, or if the heater is past about twelve years and needs anything beyond a trivial part. Repair in every other case. That is genuinely the whole decision - a water heater is a simple appliance with one catastrophic failure mode and a handful of cheap replaceable parts bolted to the outside of it.
Step 1: where is it failing?
Locating the source of the failure is the question that decides everything else, and it is answerable in twenty minutes with a roll of paper towel. Dry the heater and the floor completely, lay towel under the likely points, and look again shortly after.
Repairable, at almost any age. Inlet and outlet fittings at the top, the drain valve at the bottom front, the temperature and pressure relief valve and its pipe, heating elements, thermostats, gas control valves and thermocouples. All of these are components attached to a tank that is otherwise sound.
Not repairable, at any age. The tank. If water emerges from the base with dry fittings above it, the steel has corroded through its glass lining and the appliance is finished. There is no patch that is safe on a vessel holding hot water under mains pressure, and anyone offering one is doing you no favours.
There is one case worth ruling out before you conclude anything: condensation. A small amount of water on a gas heater on a cold morning, which does not return once the tank is up to temperature, is normal physics rather than a fault - and it is most common on a recently refilled tank.
Step 2: how old is it?
The manufacture date is on the rating plate, usually encoded in the serial number. Find it before anyone quotes you, because it changes what a fair recommendation looks like.
Conventional tanks commonly reach eight to twelve years. That range is wide because the real variables are water hardness and whether the sacrificial anode rod was ever replaced. The anode is a consumable that corrodes so the tank does not; in a hard-water house it can be spent in three or four years, and almost nobody replaces one. A twelve-year-old heater in soft water that has had its anode changed may have years left. A seven-year-old heater in hard water that has never been touched may not.
The middle case
Put the two steps together and most situations resolve immediately. A failed thermocouple on a six-year-old heater: repair it. A leaking tank at eleven years: replace it, and do not pay much for the diagnosis.
The genuine middle case is an expensive repair on a heater somewhere around nine to twelve years old - a gas control valve, say, or a second element failure inside a year. Three things settle it:
- Whether this is the first repair. One failed part on an otherwise healthy tank is ordinary. A second failure within a year means the appliance is telling you where it is heading.
- What is underneath it. A tank above finished space is a different risk from a tank standing over a floor drain, because the failure mode of an old heater is a seam letting go rather than a slow drip. The EPA notes that wet buildings and furnishings must be dried within 24 to 48 hours to avoid mould growth, and a tank failure does not arrange to happen while you are at home.
- Whether you were going to change type anyway. If you have been considering tankless, the moment the old tank needs real money is the moment to do the sum properly rather than later.
Should you switch to tankless?
Replacement time is the only sensible moment to consider it, so it belongs in this decision. The case for it is real: endless hot water, a much smaller footprint, and a longer expected life because the heat exchanger can be descaled and the parts replaced rather than the whole appliance being scrapped.
The case against is infrastructure. A gas tankless unit often needs a larger gas line and different venting than the tank it replaces, and an electric one can need significant electrical capacity. Those are real costs that sit on top of the appliance and have nothing to do with hot water. The honest test is to ask an installer what your specific house needs, then compare that total against a like-for-like tank - not to compare the two appliances as though they install identically.
What to ask before you agree
- Which part failed, and can you show me?
- What is the manufacture date on the rating plate?
- Is the leak from the tank itself or from a fitting?
- What does the repair cost, split into call-out, labour and parts?
- If I replace, is the quote like-for-like, and what does venting or gas work add?
- Will you set the thermostat to 120°F on handover?
- Has the anode rod ever been replaced, and should it be now?
The last two are worth asking even when the answer is a simple repair. An anode check is cheap while someone is already there, and the thermostat setting is the one safety decision that gets left on a default.