Iceland is famous for its breathtaking landscapes, but its high cost of living makes dining out a challenge—especially for budget travelers. As someone who has explored this Nordic paradise and the best luxury hotels in Iceland without breaking the bank, I’ve also uncovered the best cheap restaurants in Iceland that serve delicious food at reasonable prices.
Whether you're craving a hearty Icelandic lamb soup, a fresh seafood platter, or a quick hot dog at Bæjarins Beztu, there are surprisingly affordable options if you know where to look.
While many visitors assume Iceland’s restaurant prices are sky-high, plenty of hidden gems offer affordable Icelandic food without sacrificing quality. From cozy cafés in Reykjavik to family-run spots serving authentic Icelandic street food, I’ve personally tasted my way through the best budget-friendly eateries. Some even offer generous happy hours, lunch specials, or all-you-can-eat buffets, making it easier to enjoy traditional Icelandic cuisine on a budget.
In this guide, I’ll share my top recommendations for cheap eats in Iceland, highlighting local favorites, must-try dishes, and insider tips to help you save money while still enjoying the country's unique flavors. Whether you’re visiting Reykjavik, Vik, or the Golden Circle, these budget-friendly spots prove that eating well in Iceland doesn’t have to cost a fortune.
How and where to eat cheap in Iceland
The first rule for eating cheap in Iceland is to be able to cook in your own accommodation . Either in studios or apartments that have a private kitchen, or in hotels or hostels that offer access to communal kitchens where travelers like you can prepare breakfast (if it is not included) and dinner. This means a huge saving for backpackers' pockets.
There is no need to bring a suitcase full of food from your country , as you have probably read in some blog. What we do recommend you bring are products that are extremely expensive in Iceland, such as cheese or sausages. Fruit and vegetables are also expensive, but you won't have to pay a mortgage to make a salad or buy some apples and bananas.
The cheapest supermarket in Iceland is Bonus (the one with the pink pig logo), although we have to say that the prices in other supermarkets, such as Kronig or Netto, seemed similar to us. And being more expensive than in Spain, it will always be much cheaper to do your shopping and cook than to go out to eat.
What if I don't have access to a kitchen? What if I get hungry while on a road trip seeing the incredible attractions of the country and I'm 5 hours away from my accommodation? Or what if I simply want to try Iceland's local cuisine ? Don't worry, we're going to recommend 8 restaurants where you can eat cheap in Iceland :
1. Black Crust Pizzeria (Vik)
Pizza may not be one of the typical Icelandic dishes you might imagine at first glance, but when it comes down to it, you'll find at least one pizzeria in every town of a certain size you pass through. Can we say that Icelanders are the Neapolitans of the north? I can't think of a stranger combination, but it's clear that they have a passion for pizza in common.
In the picturesque town of Vik we ended up at the Black Crust pizzeria and we have to say that it was the best pizza we had on our trip , and not too badly priced. If you go, you have to try the house specialty: the black crust pizza with activated charcoal and which is surely unique in the world. Of the ones we ordered, the number 5 with a selection of Icelandic cheeses and redcurrant jam was divine. There are also several vegan pizza options. Allow around €20 per pizza.
2. Pylsuvagninn á Akureyri (Akureyri)
This iconic hot dog cart is located in the centre of Akureyri, the largest city in northern Iceland. The pylsur , as the Icelandic hot dog is called, is usually accompanied by various ingredients, from crispy or raw onions to potato chips, cheeses or pickles, and costs around 800-1200 ISK.
The cool thing about this place, unlike the more famous Bæjarins Beztu Pylsur in Reykjavik, is that they offer several vegetarian and vegan options , so if you're looking for a veg-friendly place and it's a sunny day when you're in Akureyri, you know what to do!
3. Kaffi 59 (Snaefellsness Peninsula)
We ended up here by chance and enjoyed the most comforting (and abundant) meal of the trip . It is located very close to one of the icons of northern Iceland, the Kirkjufellsfossar waterfall, but the area is not too touristy and this restaurant in particular is frequented by locals and offers hearty meals at a very good price.
Although they have a menu, the most interesting thing is their mid-day buffet offering , which includes soup, main course, vegetables, bread and dessert. The day we went there was mushroom soup, beef stew, baked potatoes, boiled broccoli and carrots and for dessert a brutal carrot cake. And you have to cut it yourself, so you can be as generous as you like hehe. The price was 2,700 ISK (less than €20).
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4. Hafnarbuðin
We didn't make it to this restaurant located in the peculiar coastal town of Höfn in the southeast of Iceland, but when we asked for foodie tips on social media, several readers who had been to Iceland recommended it to us. Apparently their fish & chips are quite legendary . It costs about 15-16€ approx. If you go, let us know how it is.
5. Kvika Kaffi
This is the restaurant at the Mývatn Nature Baths and, although the food is not exceptionally good, we recommend it because when we went there they had a goulash-type soup that could bring the dead back to life, or defrost a mammoth. The rest of the food is self-service and was not particularly tasty.
6. Askur Pizzeria
Another pizzeria, yes, but this one comes with a plus: here you can accompany it with a delicious craft beer , and even better if it's during their happy hour! The IPAs are delicious, but if you like peculiar flavors, there's a black one that has a delicious licorice flavor!
The pizzas are made in a wood oven and they have plenty of options, including vegan ones. The place is also cozy and we were served by a very nice girl who gave us local recommendations. We think it's a good option for eating in eastern Iceland.
7. Brauð & Co (Reykjavik)
Brauð & Co is one of Reykjavik's most well-known and beloved artisan bakeries , especially famous for its buttery, crunchy cinnamon buns . Although there are several locations, we recommend going to the most central one as you'll be able to see its colorful facade, adorned with a mural. Allow around 750 ISK for the roll.
Tip : Go for breakfast, as it is a VERY busy bakery and if you go in the afternoon they may not have any cinnamon buns left (although there are several types and we tried one with pecan nuts and caramel that was amazing). There are also vegan options.
8. Loving Hur (Reykjavik)
Our friend Claudia took us to eat at this vegetarian/vegan restaurant in the Icelandic capital and we left in awe. We tried several things, but the curry and the pho bo were especially delicious. The dishes are around €14-18, but they are really big.
More cheap places and restaurants in Iceland
A week is a long time and your stomach is unforgiving, so here are some other suggestions for eating in Iceland without spending a month's salary:
- Samkomuhúsið Arnarstapa , a small café on the Snaefellsness Peninsula, which prepares delicious crepes.
- Lebowski Bar , we went to have a few beers (and a White Russian, of course) during happy hour, but you should know that they have a very convenient menu of burgers, fries and drinks (approx. 2,500ISK) if you are in Reykjavik.
- The Soup Company , a Vik restaurant with several options of soups of the day, with bread and butter (with 1 free refill). The lamb soup is especially recommended.
- Friðheimar , where all dishes revolve around one product: tomatoes. They offer a tomato soup buffet, with bread and butter, for around €20. The restaurant is inside a large greenhouse… obviously for tomatoes. It is advisable to book if you go in high season.
We have reached the end of the post and we hope that you liked it and that you have noted some of our recommendations on your map. Do you know of any other places and restaurants where you can eat cheaply in Iceland ?
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