12 Scenic Places in Iceland That Are Perfect for Settling Down

I never thought I’d be googling “how to move to Iceland” after my first visit, but here we are. Every time I return, this wild island pulls me in deeper. Places like Akureyri still blow my mind, where locals swim under the northern lights like it’s no big deal, and Reykjavik, where everyone in the coffee shops seems to be writing their first novel between sips of hot chocolate.

These are the best places in Iceland to call home, and trust me, they’re incredible. From fishing towns where whales wave hello outside your window to cozy spots surrounded by waterfalls, I’m sharing the 12 places that’ll make you want to learn Icelandic and embrace those dark winters (spoiler: they’re totally worth it).

Most Amazing Places to Live in Iceland  

Looking for the best places to live in Iceland? Experience the vibrant city life in Reykjavik, known for its cultural scene, modern amenities, and stunning landscapes. Enjoy the coastal charm of Hafnarfjörður, a town rich in Viking history and geothermal pools. Live near the international airport in Keflavik, offering easy travel access and breathtaking ocean views. For a peaceful, scenic retreat, consider Siglufjörður, a picturesque fishing village surrounded by dramatic fjords. Whether you seek urban convenience, historical charm, or remote beauty, these are some of the top places to live in Iceland.

• Best for vibrant city life: Reykjavik
• Best for art and culture: Hafnarfjörður
• Best for expats: Keflavik
• Best for fishing and nature: Siglufjörður
• Best for digital nomads: Akureyri
• Best for couples: Laugarvatn
• Best for outdoor enthusiasts: Hvolsvollur
• Best for adventure lovers: Vik
• Best for families: Húsavík
• Best for solo travelers: Egilsstaðir
• Best for urban sophistication: Kopavogur
• Best for artistic community: Seyðisfjörður

1. Reykjavik

• 💰 Average Monthly Cost: $2,800 – $5,500
• 🌟 Unique Features: Vibrant arts scene, geothermal pools, stunning northern lights
• 📅 Best Time to Live There: May to September 🌞 (milder weather, long daylight hours)
• 🏆 Perfect For: Digital nomads 💻, creatives 🎨, nature lovers 🌿

Iceland’s capital is the country’s cultural and economic hub, offering a high quality of life with a mix of cosmopolitan energy and breathtaking nature. It’s compact yet lively, with trendy cafés, museums, and music festivals filling the streets.

The city is highly walkable and has efficient public transportation, making it easy to explore its charming neighborhoods. Residents enjoy top-tier healthcare, excellent schools, and a strong job market, particularly in tech, tourism, and renewable energy. And with geothermal pools, scenic hiking trails, and Northern Lights in the winter, Reykjavik perfectly balances city life with outdoor adventure.

Though the cost of living is high, the city’s safety, clean air, and vibrant community make it an incredible place to call home. If you want modern amenities with Iceland’s wild landscapes just beyond your doorstep, Reykjavik is the place to be.

2. Hafnarfjörður

• 💰 Average Monthly Cost: $2,500 – $4,800
• 🌟 Unique Features: Viking heritage, lava fields, strong local community
• 📅 Best Time to Live There: May to August 🌿 (outdoor festivals and activities)
• 🏆 Perfect For: Families 👨‍👩‍👧‍👦, history buffs ⚔️, retirees 🌄

Just a 15-minute drive from Reykjavik, Hafnarfjörður offers a quieter, more affordable alternative while still keeping you close to the capital. This charming harbor town is known for its Viking history, annual festivals, and artsy vibe, making it one of the most unique places to live in Iceland.

Built on ancient lava fields, Hafnarfjörður has a rugged beauty that sets it apart. Locals take pride in the town’s folklore—many believe elves and hidden people live among the rocks! Beyond the myths, the town is full of modern comforts, including great schools, family-friendly parks, and a thriving cultural scene. The coastal paths, geothermal pools, and scenic harbor make it a perfect place for outdoor lovers.

With plenty of local shops, diverse restaurants, and efficient transport links to Reykjavik, Hafnarfjörður is a fantastic choice for expats, families, and remote workers. 

3. Keflavik

• 💰 Average Monthly Cost: $2,300 – $4,500
• 🌟 Unique Features: Home to Iceland’s main airport, coastal charm, gateway to the Blue Lagoon
• 📅 Best Time to Live There: May to September 🌞 (best for exploring the Reykjanes Peninsula)
• 🏆 Perfect For: Travelers ✈️, remote workers 💻, peaceful living seekers 🏡

If you love coastal views and international connections, Keflavik is a fantastic choice. Home to Iceland’s main international airport, this town is perfect for frequent travelers or remote workers who need seamless global access while enjoying a peaceful Icelandic lifestyle.

Keflavik has a strong maritime heritage, with museums, a lively music scene, and cultural festivals reflecting its rich history. The stunning coastline makes for scenic walks, and you’re just a short drive from the famous Blue Lagoon—one of Iceland’s most iconic geothermal spas. The area’s unique volcanic landscapes add to its dramatic beauty.

Compared to Reykjavik, housing is more affordable, and the growing expat community makes it easy to feel at home. Despite its small size, Keflavik offers great restaurants, essential services, and a relaxed pace of life. If you want an oceanfront lifestyle with easy access to the world, this town is definitely worth considering.

4. Siglufjörður

• 💰 Average Monthly Cost: $2,000 – $4,000
• 🌟 Unique Features: Historic fishing town, scenic fjords, ski-friendly winters
• 📅 Best Time to Live There: December to March ❄️ (for skiing) or June to August 🌄 (for hiking)
• 🏆 Perfect For: Skiers ⛷️, solitude seekers 🏔️, history lovers 📜

Tucked in Iceland’s north, Siglufjörður is a hidden gem that combines small-town charm with stunning fjord views. Once a booming herring capital, it has since transformed into a picturesque, peaceful town with a deep sense of history and a close-knit community.

The town is known for its colorful harbor, folk music festival, and scenic hiking trails. Winters bring excellent skiing opportunities, while summers are perfect for boating, fishing, and exploring the dramatic landscape. If you love the outdoors, you’ll find endless ways to enjoy Siglufjörður’s fresh air and untouched beauty.

Although remote, the town has modern amenities, good schools, healthcare facilities, and a laid-back lifestyle. The Herring Era Museum keeps its fascinating past alive, while cozy cafés and local shops add to its charm. If you’re looking for a tranquil, nature-filled retreat with friendly locals and breathtaking scenery, this northern treasure is hard to beat.

5. Akureyri

• 💰 Average Monthly Cost: $2,400 – $4,700
• 🌟 Unique Features: Iceland’s northern capital, botanical gardens, whale-watching hub
• 📅 Best Time to Live There: May to September 🐳 (for warmer weather and outdoor activities)
• 🏆 Perfect For: Students 📚, families 👨‍👩‍👦, adventure seekers 🚴

Often called the “Capital of the North,” Akureyri is Iceland’s second-largest city, offering a perfect blend of urban life and outdoor adventure. While it has cozy cafés, cultural events, and a thriving arts scene, it lacks the crowds of Reykjavik, making it a more relaxed yet vibrant place to live.

Akureyri boasts top-rated schools, modern healthcare, and strong job opportunities, making it ideal for families, expats, and remote workers. Outdoor enthusiasts will love its proximity to fjords, ski slopes, and some of the country’s best whale-watching spots. In summer, lush green hills surround the city, while winter brings powdery snow perfect for skiing and snowboarding.

Despite its northern location, Akureyri enjoys surprisingly mild winters, thanks to its fjord setting and geothermal heating. With a high quality of life, welcoming community, and nature at your doorstep, it’s a fantastic choice for those seeking big-city perks without big-city stress.

6. Laugarvatn

• 💰 Average Monthly Cost: $2,200 – $4,500
• 🌟 Unique Features: Natural hot springs, peaceful lake setting, wellness retreats
• 📅 Best Time to Live There: May to October 🏊 (for enjoying the geothermal baths and hiking trails)
• 🏆 Perfect For: Wellness enthusiasts 🧖‍♂️, retirees 🌿, nature lovers 🌳

Imagine waking up to steam rising from a geothermal lake, surrounded by Iceland’s rugged landscapes and crisp, fresh air. That’s everyday life in Laugarvatn, a serene lakeside village along Iceland’s famous Golden Circle that blends wellness, nature, and community living.

At the heart of the town is Fontana Geothermal Baths, where residents and visitors soak in naturally heated pools while taking in breathtaking lake views. Thanks to underground geothermal activity, the lake itself stays warm enough for swimming year-round. The surrounding area is a haven for hiking, fishing, and exploring iconic landmarks like Gullfoss waterfall, Geysir, and Thingvellir National Park.

Despite its peaceful atmosphere, Laugarvatn has essential amenities, a close-knit community, and a strong focus on sustainability. If you’re looking for a slower pace of life, easy access to Iceland’s natural wonders, and a deep connection to nature, this hidden gem is the perfect retreat.

7. Hvolsvollur

• 💰 Average Monthly Cost: $2,000 – $4,000
• 🌟 Unique Features: Close to waterfalls and glaciers, rich Viking history, small-town feel
• 📅 Best Time to Live There: May to September 🌞 (ideal for exploring the South Coast)
• 🏆 Perfect For: Outdoor adventurers 🏔️, history lovers 📖, eco-conscious residents 🌍

Set against a backdrop of volcanoes, waterfalls, and vast green landscapes, Hvolsvöllur is a peaceful town with easy access to Iceland’s most breathtaking sights. Located along the Ring Road, this small community offers a quiet yet adventurous lifestyle, making it an ideal base for outdoor lovers.

Just a short drive away, you’ll find Seljalandsfoss and Skogafoss, two of Iceland’s most famous waterfalls, as well as Thórsmörk Nature Reserve, a paradise for hikers. Hvolsvöllur is also rich in Viking history, with museums and cultural sites that bring Iceland’s past to life. Despite its rural charm, the town has modern amenities, good schools, and a strong local community.

For those seeking a slower pace of life without sacrificing adventure, Hvolsvöllur offers stunning scenery, a welcoming atmosphere, and easy access to some of Iceland’s greatest natural wonders.

8. Vik

• 💰 Average Monthly Cost: $2,300 – $4,600
• 🌟 Unique Features: Famous black sand beaches, dramatic cliffs, remote beauty
• 📅 Best Time to Live There: June to August 🌊 (best for enjoying the coastline and puffin watching)
• 🏆 Perfect For: Photographers 📷, nature enthusiasts 🌲, peaceful living seekers 🏡

Vík is where Iceland’s raw, untamed beauty takes center stage. As the southernmost village in the country, it’s famous for its dramatic black sand beaches, towering basalt cliffs, and rugged coastline. With the Mýrdalsjökull glacier looming in the background, this small yet vibrant community feels like a world of its own.

Sitting near Reynisfjara Beach, one of Iceland’s most iconic natural wonders, Vík offers breathtaking views where the Atlantic’s powerful waves crash against volcanic sands. The nearby Dyrhólaey cliffs provide panoramic ocean scenery and a summer home for puffins, making it a haven for nature lovers.

Despite its remote location, Vík has essential services, cozy cafés, and a laid-back atmosphere. For those who crave a peaceful coastal lifestyle surrounded by dramatic landscapes, Vík delivers seclusion, adventure, and some of Iceland’s most unforgettable views.

9. Húsavík

• 💰 Average Monthly Cost: $2,300 – $4,700
• 🌟 Unique Features: Best whale-watching spot in Iceland, charming harbor, hot springs
• 📅 Best Time to Live There: May to September 🐋 (for whale-watching and outdoor activities)
• 🏆 Perfect For: Wildlife lovers 🐬, sailors ⛵, peaceful coastal living enthusiasts 🌊

Húsavík is a charming northern town best known as Iceland’s whale-watching capital. Nestled along Skjálfandi Bay, this coastal gem offers unmatched opportunities to see humpback, minke, and even blue whales in their natural habitat.

Beyond the sea, Húsavík boasts a rich maritime history, colorful harbor, and a welcoming small-town vibe. The Húsavík Whale Museum provides fascinating insights into the region’s connection with the ocean, while the town’s geothermal sea baths offer the perfect way to relax while enjoying breathtaking views of the bay.

Húsavík’s location makes it an excellent base for exploring North Iceland’s natural wonders, including the Ásbyrgi Canyon, Lake Mývatn, and Dettifoss—Europe’s most powerful waterfall. With its tight-knit community, stunning coastal scenery, and peaceful lifestyle, Húsavík is an ideal spot for those looking to embrace nature and small-town Icelandic charm.

10. Egilsstaðir

• 💰 Average Monthly Cost: $2,100 – $4,300
• 🌟 Unique Features: Largest town in East Iceland, surrounded by forests and fjords
• 📅 Best Time to Live There: May to September 🌲 (best for hiking and exploring the highlands)
• 🏆 Perfect For: Hikers ⛰️, solitude seekers 🏡, eco-conscious residents 🌍

Egilsstaðir is the heart of East Iceland, offering a perfect mix of modern conveniences and untouched nature. As the region’s largest town, it has essential services, shops, and restaurants while maintaining a peaceful, small-town feel.

Surrounded by forests, waterfalls, and the scenic Lagarfljót lake—rumored to be home to Iceland’s own sea monster—Egilsstaðir is a paradise for outdoor lovers. Hiking, fishing, and wildlife spotting are part of everyday life, and nearby attractions like Hengifoss waterfall add to the area’s appeal. The town’s central location also makes it a great base for exploring the remote and beautiful Eastfjords, known for their dramatic cliffs and quiet fishing villages.

Egilsstaðir enjoys more sunshine than many other Icelandic towns, making winters slightly milder and outdoor adventures more accessible year-round. If you’re looking for a quieter, nature-focused lifestyle without sacrificing modern amenities, this charming town offers the best of both worlds.

11. Kopavogur

• 💰 Average Monthly Cost: $2,600 – $5,200
• 🌟 Unique Features: Modern city, excellent shopping, next to Reykjavik but quieter
• 📅 Best Time to Live There: May to September 🌞 (outdoor activities and festivals)
• 🏆 Perfect For: Professionals 💼, families 👨‍👩‍👧‍👦, luxury seekers 🏙️

If you want big-city convenience without the downtown Reykjavik crowds, Kópavogur is a fantastic option. As Iceland’s second-largest city, it offers a mix of modern living, cultural attractions, and stunning nature—all just a short drive from the capital.

Kópavogur is home to top-rated schools, large shopping centers, and excellent public services, making it a great choice for families and professionals. The city’s iconic Kópavogskirkja church sits atop a hill, offering panoramic views of the surrounding area. You’ll also find museums, art galleries, and an active nightlife scene, ensuring there’s always something happening.

Nature lovers will appreciate the city’s waterfront walking paths, green parks, and easy access to geothermal pools. With its growing economy, diverse housing options, and strong community feel, Kópavogur is ideal for anyone looking to enjoy modern Icelandic life with a touch of tranquility.

12. Seyðisfjörður

• 💰 Average Monthly Cost: $2,200 – $4,500
• 🌟 Unique Features: Colorful houses, artsy vibes, breathtaking fjord views
• 📅 Best Time to Live There: June to August 🎭 (best for art festivals and hiking)
• 🏆 Perfect For: Artists 🎨, nature lovers 🌿, small-town enthusiasts 🏡

Nestled at the end of a picturesque fjord, Seyðisfjörður is one of Iceland’s most charming and artistic towns. With its colorful wooden houses, thriving arts scene, and dramatic mountain backdrop, it feels like a storybook come to life.

This small but vibrant community is known for its creative energy, attracting artists, musicians, and nature lovers alike. The town hosts LungA Art Festival, a celebration of Icelandic and international creativity. The famous Rainbow Street leads to a cozy downtown filled with cafés, galleries, and unique boutiques.

Beyond its artistic charm, Seyðisfjörður offers stunning hiking trails, breathtaking waterfalls, and scenic ferry connections to Europe. Winters are peaceful, while summers bring a lively atmosphere with travelers passing through. If you’re looking for a close-knit community with an artistic spirit and unparalleled natural beauty, Seyðisfjörður is the perfect place to call home.

Frequently Asked Questions (FAQs) About the Best Places to Live in Iceland           

Curious to learn more about the top living destinations in Iceland? Below are some frequently asked questions that I often encounter regarding the best places to settle in Iceland.

Where is best to live in Iceland?

Deciding where to live in Iceland depends on your lifestyle preferences. Reykjavik, the capital, is ideal for those seeking a vibrant city life combined with cultural richness. It’s perfect for expats and English speakers. For a more laid-back, artistic environment, Hafnarfjörður or Seyðisfjörður are excellent choices, offering community-centric living and a strong cultural scene. Keflavik, with its proximity to the airport, is great for frequent travelers or expats.

If you’re drawn to natural beauty and outdoor activities, Akureyri and Egilsstaðir are top picks. They provide easy access to Iceland’s stunning landscapes and offer a balance of modern amenities and natural serenity. For those seeking a close-knit community vibe, smaller towns like Vik, Húsavík, or Laugarvatn are ideal. They offer a slower pace of life with a strong connection to nature.

Each location in Iceland has its unique charm and advantages, making it important to consider your personal and professional needs when choosing the best places in Iceland to live in.

Can you live in Iceland as a foreigner?

Absolutely, you can live in Iceland as a foreigner. In fact, Iceland is known for its welcoming attitude towards expatriates. Key steps for foreigners include obtaining a residence permit, which is necessary for stays longer than three months. For non-EU/EEA citizens, this typically involves having a job offer from an Icelandic company or enrolling in one of the country’s educational institutions.

Once in Iceland, foreigners often find a high standard of living, a strong sense of community, and a safe environment. English is widely spoken, especially in larger towns and tourist areas, easing the transition for many expatriates. However, learning some Icelandic can be beneficial for deeper integration into the local community.

Expats in Iceland enjoy access to excellent healthcare, a robust education system, and a lifestyle that balances work and leisure, all set in a country with stunning natural beauty. This makes Iceland not only a feasible option for living as a foreigner but also an enriching and life-enhancing one. It’s one of the best Iceland cities for those looking for a safe, welcoming, and beautiful place to call home.

Is it very expensive to live in Iceland?

Living in Iceland can indeed be expensive, with the cost of living being higher compared to many other countries. This is particularly true in the capital, Reykjavik, which is often cited as one of the most livable cities in Iceland but also one of the most costly. Key factors contributing to the high cost of living include:

• Housing: Rent and real estate prices in popular areas, especially in Reykjavik, are high. The demand often surpasses supply, leading to increased costs.

• Food and Groceries: Due to its remote location and reliance on imports for many goods, grocery prices can be steep. However, local products like dairy and fish might be more affordable.

• Transportation: Owning and maintaining a vehicle can be expensive, although public transport is available and efficient, especially in larger towns.

• Utilities: In contrast, utilities like heating and electricity are relatively affordable, thanks to Iceland’s abundant geothermal energy.

• Leisure and Entertainment: Prices for dining out, entertainment, and other leisure activities are on the higher side, reflecting the overall cost of living.

Despite the high costs, many find that Iceland’s quality of life, natural beauty, and safety offsets these expenses. Budgeting carefully and embracing some local habits, like enjoying the great outdoors, can make living in Iceland more manageable financially.

Is it very expensive to live in Iceland?

Yes, living in Iceland can be quite expensive. The high cost of living is a well-known aspect of this beautiful country. Several factors contribute to this:

• Housing Costs: In areas like Reykjavik, housing can be particularly pricey. Renting or buying property in the capital, one of Iceland’s best places to live, often comes with a significant cost.

• Groceries and Food: The cost of food is higher in Iceland compared to many countries. This is due to its remote location and the need to import many goods. However, local products like fish and dairy are relatively more affordable.

• Transportation: Owning a car can be expensive due to high import taxes and fuel costs. Public transportation is available but can also be costly, especially outside of Reykjavik.

• Utilities: Interestingly, utilities such as heating and electricity are more affordable in Iceland, thanks to its geothermal and renewable energy sources.

• Leisure Activities: Dining out, entertainment, and other activities can add to the expense, reflecting the general cost of living in Iceland.

While living in Iceland is costly, many residents find that the country’s quality of life, safety, and natural beauty make it a worthwhile place to live. Budgeting and adopting local habits, like enjoying nature, can help manage expenses.

Is it a good idea to live in Iceland?

Living in Iceland can be a wonderful idea, depending on what you value in a living environment. Iceland is often praised for its unique qualities that make it an appealing place to reside:

• Natural Beauty: One of the most compelling reasons to live in Iceland is its unparalleled natural scenery. From geysers and waterfalls to volcanoes and glaciers, it’s an outdoor enthusiast’s paradise.

• Safety: Iceland consistently ranks as one of the safest countries in the world. Low crime rates contribute to a high quality of life.

• Strong Community: Icelandic society is known for its strong sense of community and egalitarianism. It’s an ideal place for those seeking a close-knit, supportive living environment.

• Health and Education: The country boasts excellent healthcare and education systems, which are accessible to all residents.

• Cultural Richness: Iceland has a rich cultural heritage, with a thriving arts scene, music, and literature. This cultural vibrancy is evident in its many festivals and events.

• Work-Life Balance: Icelanders place a strong emphasis on work-life balance, making it an attractive place for those looking to avoid the hustle and bustle of more frantic urban centers.

However, the high cost of living and challenging weather conditions are factors to consider. If you appreciate a peaceful, safe environment with stunning natural beauty and don’t mind the expenses and colder climate, living in Iceland could be a great fit. It’s one of the best places to live in Iceland for those who value these qualities in their daily life.

Can I live in Iceland permanently?

Yes, it is possible to live in Iceland permanently, but there are certain procedures and requirements to be followed, particularly for non-EU/EEA citizens:

• Residence Permits: To live in Iceland for more than three months, you’ll need a residence permit. There are different types of permits, such as for work, study, or family reunification.

• Permanent Residency: After living in Iceland for a certain number of years with a legal residence permit (usually four years), you may apply for a permanent residency permit. This status allows you to stay in Iceland indefinitely and enjoy more rights, similar to Icelandic citizens.

• Citizenship: After living in Iceland for seven out of the last ten years, you can apply for Icelandic citizenship. This gives you the right to vote in national elections and a passport that allows for extensive visa-free travel.

• Integration and Language: While integrating into Icelandic society, learning the Icelandic language can be beneficial, even though many Icelanders speak English.

Living in Iceland permanently is an achievable goal, especially for those who appreciate the country’s lifestyle, culture, and environment. It’s an opportunity to be part of one of Iceland’s best places to live, with a strong community, beautiful landscapes, and high quality of life.

Do they speak English in Iceland?

Yes, English is widely spoken in Iceland, particularly in tourist areas, businesses, and urban centers. While Icelandic is the official language, most Icelanders speak English fluently:

• Education: English is a mandatory subject in schools, so most Icelanders start learning it at a young age.

• Tourism and Business: Given Iceland’s robust tourism industry and international business relations, English is commonly used in these sectors.

• Daily Interactions: In daily life, especially in larger towns and cities like Reykjavik, Akureyri, and others that are considered the best places to live in Iceland, English speakers will rarely face a language barrier.

• Local Media and Entertainment: English-language media is readily accessible, and many Icelanders enjoy English-language entertainment, further strengthening their language skills.

For tourists and expatriates, this widespread proficiency in English eases communication and helps with integration into Icelandic society. However, learning some basic Icelandic phrases is appreciated and can enhance the cultural experience.

Final Thoughts on the Best Places to Live in Iceland 

Iceland, a country of stark beauty and resilient spirit, offers a living experience as unique as its landscapes. From the vibrant city life of Reykjavik to the tranquil shores of Húsavík, each corner of this island nation has its own charm. Whether you’re seeking the cultural heartbeat of the city or the serene embrace of nature, Iceland caters to a diverse range of preferences.

For those mindful of budget and tranquility, towns like Akureyri and Egilsstaðir strike a perfect balance, proving that living in Iceland can be both affordable and fulfilling. Meanwhile, if you thrive in an environment rich in art and history, places like Seyðisfjörður and Hafnarfjörður are cultural gems waiting to be explored.

Well-being and happiness are not just buzzwords in Iceland; they are a way of life. Communities like Vik and Laugarvatn, often highlighted as some of the best places to live in Iceland, exemplify this, offering a lifestyle that harmoniously blends outdoor adventures with the comforts of modern living.

So, what are the best places to move in Iceland? The answer varies as much as the landscapes of this beautiful country. It depends on what you cherish most in your ideal living environment. Whether it’s for the dynamic urban scene, breathtaking natural settings, or the rich cultural tapestry, one thing is certain: Iceland is more than a destination – it’s an experience.