Abstract High investment costs are a key impediment to the energetic refurbishment of residential buildings in Germany. A versatile consumer market for smart thermostat systems suggests that they might constitute a low-investment alternative that is also accessible for tenants. Here, we assess the cost-effectiveness of smart thermostat systems under different conditions and in comparison with other mitigation measures. A dynamic investment model is set up and applied to two typical home types, an average single-family house and an average apartment, built between 1949 and 1978. The impact of variables such as relative savings, building efficiency standard, investment cost, and heating fuel price on CO2 mitigation costs and payback times is investigated using sensitivity analyses. Smart thermostat systems are cost-effective for the two home types if relative savings of at least 5.7% (single-family house) and 7.7% (apartment) are achieved. Both CO2 mitigation costs and payback times strongly decrease with increasing relative savings for values below 10%. Similarly, the level of savings needed to achieve cost-effectiveness strongly increases with increasing building efficiency for values below 100 kWh/m2a. We demonstrate that smart thermostat systems can be a low-investment measure to cost-effectively reduce CO2 emissions and energy consumption in the residential building sector. They should be used primarily in buildings with a medium to low efficiency standard, where energetic refurbishment is unlikely in the coming years. To assess the economic mitigation potential of smart thermostat systems, broad and granular empirical data on realized heating energy savings is urgently needed.