If you are on the budget train, I would recommend always picking somewhere to stay which has an oven & hobs. This will make it easier to cook cheap fresh nutritious meals. If you are only planning on staying somewhere one night during the winter months, try and pick an accommodation which offers free towel use. This will come in extremely handy as your towels definitely wont have time to dry. Nothing worse than trying to dry yourself with a damp icy towel.

Mar Guesthouse

Situated by the sea in Grindavik, 10minutes away from the Blue Lagoon & 27km from the airport. It is the perfect location to stay before flying from the International airport or for an adventurous evening chasing the Northern Lights. There is Free WIFI and a messy communal kitchen. The kitchen has half a dozen ovens & hobs, however, only one or two of them actually work. There are plenty of parking spaces right outside the building, which is great if you have a car. Check in was extremely simple, we didn’t see a single member of staff our whole stay, therefore would only recommend staying here towards the end of your trip. Local knowledge and advice is extremely useful. The large rooms had a minimal design & there are 4 good standard bathrooms and showers per floor.

Spirt Farm

Situated in the heart of the Golden Circle. It is the perfect location to spot the Northern lights on clear winter nights. There is Free WIFI, a shared lounge, bathroom and kitchen which has various cooking facilities including an access to seasonings, oven, hobs and fridge. To get to this location you will need to have access to a car, (preferably a 4×4) as it really is in the middle of nowhere. During your trip to Iceland I would strongly recommend staying here for a couple of nights. Thor owns the hostel and is a really cool, knowledgeable, funny, down to earth guy who also owns two dogs!! The rooms were small(ish) but warm and comfy, with amazing big windows.

Only negative is the showers didn’t have a lot of water pressure and turned lukewarm throughout the shower.

Disa’s Homestay

Situated 12km from the airport, it is perfect for late night landings, early morning take offs or Northern Light hunting. There is Free WIFI, a shared lounge, bathroom and kitchen, which has various cooking facilities including a dishwasher, microwave, fridge and oven. As it is in a residential area free parking isn’t an issue. Disa usually messages in advance to confirm your estimated arrival so she can be present.

During your trip to Iceland I would recommend staying in a homestay, its so homely and a freshing change from hostels. Disa can also recommend the best places to drive to see the Northern lights depending on the weather conditions. Local knowledge is an excellent tool which can increase your chances of spotting them. The room itself was pretty small, basic and homely. The bed was so comfy!!!! I had the best night sleep here of the whole trip! It was also home to the nicest bathroom and shower we visited the whole trip too!

Reykjavik Hostel Village

Situated in the heart of Reykjavik. This family owned hostel is 100m from Reykjaviks main shopping street and 300m from Hallgrimskirkja Church. Perfect if you have rented a car as there is always a spot right in front of the building. The hostel village provides instructions in case you arrive outside of the reception opening hours. Once you enter the building the reception is rammed with tour leaflets and excursions brochure’s.

The workers are friendly and knowledgeable, however, they are only present at the hostel during specific hours of the day, which can sometimes be a huge inconvenience. Free WIFI and access to a kitchen block is also provided. Like many hostels, left over food is freely available to use, including tea and coffee. The rooms are okay value for money, clean & simply finished, split between two buildings. One next to the kitchen block & the other further down the road. Inside the rooms have a mini fridge, which is great to keep milk, yogurts and veg fresh. The bathroom facilities are also basic and shared, like most accommodation in Iceland the shower smells sulphurous but this shouldn’t put you off. Note this hostel does not have a washing machine.

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  1. Iceland is at the top of my bucket list and these are some really handy ideas of where to stay. Love the fact that you’ve included maps too!

  2. Great guide for accommodations. Iceland is at the top of our bucket list so this is helpful information to keep for future planning!

  3. Trust me, I’m always on the budget train! Iceland is a bit daunting to me for that exact reason, so it’s great to see some affordable options.

  4. That is a really great point about the towels, I hadnt thought of that! And I really like the sound of the place in the perfect spot for viewing the northern lights!

  5. I would love to visit the northern lights and Iceland would be the perfect place to do that. I also appreciated you posting the maps! We’ve not yet been to Iceland but it’s definitely on our bucket list. Thanks for sharing!

  6. I knew Iceland could be expensive so I am glad to hear about the more affordable options. Great tip about the free use of towels. I would have never thought about towels not drying overnight.

  7. Spirt Farm sounds like the type of place I’d like to stay at .. at destinations like this where there’s lots of options for accommodation, the level of interaction and input you get from the host can make or break your stay, and leave you with some fabulous memories.

  8. I wish I had this guide before I visited Iceland four years ago! It’s really difficult to find an affordable place to stay and your suggestions are really helpful! I will save this just in case I ever have a chance to visit this lovely place again! Thanks for all the hard work that went in to putting this together and brilliant idea about assuring that these places have towels!

  9. I’m off to Iceland soon (I mean when covid ends) and I’m putting up my list. Happy that I came across your post! <3 This accommodation list helps.

  10. Great list! Reykjavik is notoriously expensive, so it’s great that you have some options within various budgets!

  11. I’d love to stay at Disa’s Homestay – getting to know locals is always the best part of traveling, and you’re right that it’s a great change from hostels! 🙂

  12. Great information, although we had to look up ‘hobs’! LOL
    Iceland and the Northern Lights are a bucket list item fo us, but our thin Florida blood makes it a bit of a challenge. Thanks for sharing.

  13. Great pointers on accommodation. Iceland is one of the countries where we couldn’t decide where we want to stay. Because the accommodations were very limited the time we went, and we were left with a few choices. Although i remember staying in a beautiful farm in Akureyri. It turned out to be one of the beat stays in Iceland.

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