Where to Stay in East Iceland: 5 Best Towns & Hotels for Every Traveler

Where to stay in East Iceland can be surprisingly difficult to figure out because this region is much larger than it looks on a map, and each town offers a completely different experience.

During our recent Ring Road Trip, we spent four nights exploring East Iceland and quickly fell in love with its charming fishing villages, dramatic scenery, and fewer crowds.

In this guide, I’m sharing the best places to stay in East Iceland, including my personal recommendations for the best overall base, the prettiest town in Iceland, and where to stay for puffins, hiking, and scenic fjord views.

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Short on Time? Here’s Where to Stay in East Iceland 💛

Where to Stay in East Iceland: Best Towns + Hotels

Below you’ll find my detailed descriptions of the best towns and hotels to stay at in East Iceland, plus my top recommendations from my own personal experience based on our recent 12 Day Ring Road Trip!

1. Egilsstaðir (Best Overall for Where to Stay in East Iceland)

If you’re wondering where to stay in East Iceland, my answer is simple: Egilsstaðir.

Centrally located in the heart of East Iceland, Egilsstaðir makes it easy to take day trips to many of the best places to visit in East Iceland while still having access to restaurants, a grocery store, and a gas station.

Most Ring Road travelers only spend one night here before continuing north, but after spending three nights in Egilsstaðir, I highly recommend slowing down and staying longer.

East Iceland ended up being our favorite region to visit in Iceland. It’s incredibly beautiful, far less crowded than the South Coast, and has a more authentic Icelandic feel.

Best for: First-time visitors to East Iceland, Ring Road travelers, and anyone wanting to explore a less touristy area of Iceland.

Where to Stay in Egilsstaðir: Best Hotels and Cabin Rentals

🌟 Best Cabin Near Egilsstaðir: Kaldá Lyngholt

⭐ Rating: 9.7/10 | ✅ Book Here

We stayed at Kaldá Lyngholt for three nights, and it was the perfect base for exploring East Iceland.

Located just 10 minutes from Egilsstaðir, this beautiful property features just three cozy cabins tucked into the countryside. With their charming Icelandic aesthetic, the cabins were the perfect place to unwind after busy days exploring.

What made this stay so special was how peaceful it felt. The property has a forest-surrounded hot tub, a small waterfall you can walk to, and incredibly welcoming owners who provided a guidebook filled with local recommendations and hidden gems.

Best For
✔ Couples looking for a cozy cabin stay
✔ Travelers wanting a peaceful base near Egilsstaðir
✔ Anyone planning to spend multiple days exploring East Iceland

Why We Loved It
✔ Cozy cabins with beautiful Icelandic design
✔ Peaceful countryside setting just 10 minutes from town
✔ Hot tub with scenic forest views
✔ Waterfall within walking distance

👉 Check Prices & Availability at Kaldá Lyngholt

🏡 Most Charming Hotel in Egilsstaðir: Gistihúsið – Lake Hotel

⭐ Rating: 9.0/10 | ✅ Book Here

Located on the shores of Lake Lagarfljót, Gistihúsið – Lake Hotel Egilsstaðir is a beautiful family-run hotel that blends historic charm with modern comforts.

One of the biggest highlights is the on-site Baðhúsið Spa, which features a geothermal hot tub, sauna, and relaxation areas overlooking the lake. The hotel is also just a short distance from restaurants and shops in Egilsstaðir.

Best for: Couples, travelers looking for a relaxing stay, and anyone wanting to unwind after a day of exploring East Iceland.

👉 Check Prices & Availability at Gistihúsið – Lake Hotel Egilsstaðir

🏨 Best Hotel in Egilsstaðir for Location: Hérað – Berjaya Iceland Hotels

⭐ Rating: 8.6/10 | ✅ Book Here

Located right in the center of Egilsstaðir, Hérað – Berjaya Iceland Hotels is one of the most convenient places to stay in town. The hotel is within walking distance of restaurants and shops, making it an excellent option if you want to stay close to everything.

Best for: Travelers who want to stay in town and be close to amenities.

👉 Check Prices & Availability at Hérað – Berjaya Iceland Hotels

My Recommendation

If it’s your first time visiting East Iceland, I think Egilsstaðir is hands-down the best place to stay. Spending three nights here gave us enough time to truly experience the region, and I think many travelers miss out by only staying one night. If you have room in your itinerary, I highly recommend spending at least 2-3 nights in Egilsstaðir and using it as your base for exploring East Iceland.

2. Höfn (Best Gateway to East Iceland)

Although Höfn is technically located in Southeast Iceland, many Ring Road travelers (ourselves included!) stay here as a gateway to East Iceland. It’s the perfect place to spend a night after visiting Jökulsárlón Glacier Lagoon and Diamond Beach before continuing into the Eastfjords.

Because East Iceland is much larger than it looks on a map, I wouldn’t recommend using Höfn as your only base for the region. Instead, plan to spend one night near Höfn and another 1-3 nights further into East Iceland, such as in Egilsstaðir.

Best for: Ring Road travelers, glacier lagoon visitors, and anyone looking to break up the long drive from Vík (South Coast) and East Iceland.

Where to Stay in Höfn, Iceland: Best Hotels and Guesthouses

🌟 Best Hotel Near Höfn: Hrafnavellir Guest House

⭐ Rating: 9.6/10 I ✅ Book Here

We stayed at Hrafnavellir Guest House for one night during our recent Ring Road trip, and it was the perfect choice for us.

Just outside of Höfn, this family-owned property offers beautiful new cabins with stunning mountain views.

What made this stay so special was the hospitality. The owners were so friendly & welcoming and shared recommendations for East Iceland, taught us more about Icelandic culture, and prepared a delicious traditional Icelandic breakfast.

Best For
✔ Couples looking for a peaceful getaway
✔ Ring Road travelers wanting a relaxing overnight stop
✔ Anyone who loves beautiful scenery and unique accommodations

Why We Loved It
✔ Stunning mountain views from your private patio
✔ Family-owned with incredibly friendly hosts
✔ Delicious traditional Icelandic breakfast included
✔ Peaceful location away from the crowds

👉 Check Prices & Availability at Hrafnavellir Guest House

🏨 Best Hotel in Höfn for Location: Milk Factory

⭐ Rating: 8.9/10 I ✅ Book Here

If you prefer staying directly in town, Milk Factory is one of the best places to stay in Höfn. It is a highly-rated guesthouse that was build in a historic Milk Factory. The rooms are modern and comfortable, breakfast is included, and you’ll be within walking distance of restaurants.

Best for: Travelers who want a convenient location and easy access to town.

👉 Check Prices & Availability at the Milk Factory

My Recommendation

If you’re driving the Ring Road, I highly recommend spending a night near Höfn. While it’s technically not part of East Iceland, it’s the perfect place to break up the long drive from Vík (or elsewhere in the South Coast) and gives you time to explore.

3. Seyðisfjörður (Best for Charm & Scenery)

If you’re looking for the most beautiful town in East Iceland, it’s hard to beat Seyðisfjörður. Often considered one of the prettiest towns in Iceland, this charming fishing village is surrounded by dramatic mountains, waterfalls, and one of Iceland’s most stunning fjords.

Located just 26 km (16 miles) from Egilsstaðir, Seyðisfjörður makes a fantastic base for travelers who want beautiful scenery while still having access to some restaurants, shops, and hiking trails. Even if you don’t stay here, I highly recommend adding it to your East Iceland itinerary as a day trip.

We visited as a day trip (stayed in Egilsstaðir) but I absolutely fell in love with this charming town. I could have easily spent a night here.

The drive into town is also part of the experience. To reach Seyðisfjörður, you’ll need to cross the Fjarðarheiði mountain pass on Road 93. The road is fully paved, but it can occasionally be foggy or snowy at the top. As you descend into town, you’ll pass several waterfalls and viewpoints, including the famous spot from The Secret Life of Walter Mitty.

Best for: Couples, photographers, and travelers looking for a scenic and charming base in East Iceland.

Where to Stay in Seyðisfjörður, Iceland: Best Hotels and Guesthouses

🌟 Best Overall Place to Stay in Seyðisfjörður: Við Lónið Guesthouse

⭐ Rating: 8.6/10 | ✅ Book Here

Set right directly on the Rainbow Street in the heart of Seyðisfjörður, Við Lónið Guesthouse is one of the best places to stay in town.

This charming guesthouse offers cozy rooms, beautiful waterfront views, and an unbeatable location. This guesthouse is also one of the more budget-friendly options, which is an added bonus in Iceland!

Best for: Couples and travelers looking for a charming stay in the heart of Seyðisfjörður.

👉 Check Prices & Availability for Við Lónið Guesthouse

🏡 Best Boutique Hotel in Seyðisfjörður: Hotel Aldan

⭐ Rating: 8.6/10 | ✅ Book Here

Located right in the heart of town, Hotel Aldan is one of the most charming places to stay in East Iceland.

The hotel occupies three beautifully restored historic buildings (Snæfell, Dúlluhús, and Bankinn) so you choose which building you want to book a room in. Each building has its own unique history, but all of them offer an unbeatable location within walking distance of the harbor, Rainbow Street, restaurants, and shops.

Best for: Couples and travelers looking for a charming & historic stay in the center of town.

👉 Check Prices & Availability for Snæfell – Hotel by Aldan

My Recommendation

While I personally think Egilsstaðir is the better base (location-wise) for exploring East Iceland, I loved Seyðisfjörður.

If you love charming towns, stunning scenery, and cozy restaurants, I highly recommend spending 1-2 nights here. It’s one of the most beautiful places we visited in Iceland and somewhere I would absolutely stay on a future trip.

4. Borgarfjörður Eystri (Best for Puffins & Hiking)

If you’re looking to get off the beaten path in East Iceland, Borgarfjörður Eystri is hard to beat. This remote village is surrounded by dramatic mountains and some of the best hiking trails in Iceland.

Located about 75 km (47 miles) northeast of Egilsstaðir, reaching Borgarfjörður Eystri requires crossing a mountain pass. The road is fully paved, but the village feels worlds away from the rest of Iceland.

We visited Borgarfjörður Eystri as a day trip from Egilsstaðir, and it ended up being one of the highlights of our trip. If you’re visiting during puffin season or love hiking and quiet villages, I could easily see spending a night or two here.

The biggest draw is Hafnarhólmi, which is widely considered the best place in Iceland to see puffins. From mid-May through early August, thousands of puffins nest here, and a wooden boardwalk allows you to get within an arm’s reach of the birds without disturbing their habitat.

Best for: Puffin lovers, hikers, and travelers looking for a remote and authentic Icelandic experience.

Where to Stay in Borgarfjörður Eystri: Best Hotels & Guesthouses

🌟 Best Place to Stay in Borgarfjörður Eystri: Blábjörg Resort

⭐ Rating: 9.1/10 | ✅ Book Here

Located right on the water, Blábjörg Resort is one of the best places to stay in Borgarfjörður Eystri. The resort offers comfortable rooms, beautiful sea views, and an excellent on-site restaurant. Just be sure to make dinner reservations in advance, especially during the summer months.

One of the highlights of staying here is the unique geothermal bath and sauna, making it the perfect place to relax after a day of puffin watching or hiking.

Best for: Puffin lovers, hikers, and travelers wanting to experience one of Iceland’s most remote villages.

👉 Check Prices & Availability at Blábjörg Resort

🏨 Best Guesthouse in Borgarfjörður Eystri: Álfheimar Guesthouse

⭐ Rating: 8.5/10 | ✅ Book Here

Located in the heart of the village, Álfheimar Guesthouse offers simple and comfortable accommodations with easy access to the harbor, hiking trails, and puffin colony.

Best for: Travelers looking for a cozy and affordable stay in the center of the village.

👉 Check Prices & Availability at Álfheimar Guesthouse

My Recommendation:

Most travelers visit Borgarfjörður Eystri as a day trip from Egilsstaðir, but if seeing puffins is high on your Iceland bucket list, I’d consider spending a night here during the summer months. Between the puffin colony, dramatic scenery, and peaceful atmosphere, this tiny village offers a completely different side of Iceland that many visitors never get to experience.

5. Djúpivogur (Best Hidden Gem Stopover)

If you’re looking for a charming stop along Iceland’s Eastfjords, don’t overlook Djúpivogur. Before our Ring Road trip, I hadn’t heard much about this small fishing village, so I was pleasantly surprised when we stopped here.

Located along Route 1 between Höfn and Egilsstaðir, Djúpivogur makes a great overnight stop for Ring Road travelers. While we didn’t stay here ourselves, I could easily see spending a night in this peaceful harbor town, especially if you want more time to explore the Eastfjords.

We stopped for some famous Icelandic hot dogs overlooking the harbor and visited the local brewery, and I immediately understood why so many people fall in love with this hidden gem.

Best for: Ring Road travelers, couples, and anyone wanting to explore the Eastfjords and coastal villages at a slower pace.

Where to Stay in Djúpivogur: Best Hotels & Guesthouses

🌟 Best Overall Place to Stay in Djúpivogur: Hotel Framtíð

⭐ Rating: 8.5/10 | ✅ Book Here

Located right on the harbor, Hotel Framtíð is one of the best places to stay in Djúpivogur. The hotel offers a variety of accommodations, including hotel rooms and cottages, and its central location makes it easy to explore the village on foot.

Best for: Travelers looking for a convenient and charming stay in the heart of Djúpivogur.

👉 Check Prices & Availability at Hotel Framtíð

My Recommendation:

I wouldn’t use Djúpivogur as my main base for exploring East Iceland, but I do think it’s one of the most underrated stops along the Ring Road. If you’re looking to slow down and experience the scenic Eastfjords, this charming fishing village makes a wonderful overnight stop between the South Coast/Höfn and Egilsstaðir.

How Many Nights Should You Spend in East Iceland?

While it’s possible to see some of East Iceland in just one night, I think this incredible region deserves much more time than most Ring Road itineraries allow. I recommend spending at least 2-3 nights in East Iceland, which gives you enough time to visit places like Stuðlagil Canyon, Seyðisfjörður, Vök Baths, and Borgarfjörður Eystri without feeling rushed. We spent three nights in Egilsstaðir and still could have easily stayed longer. If you enjoy hiking, photography, or simply slowing down and exploring Iceland’s charming small towns, consider spending 3-4 nights in the region.

FAQs: Where to Stay in East Iceland

Final Verdict: Where to Stay in East Iceland for Your Trip

Choosing where to stay in East Iceland ultimately comes down to the type of trip you’re looking for. For most travelers, I recommend staying in Egilsstaðir for 2-3 nights and taking day trips to the surrounding villages and attractions. However, whether you choose a charming fjord town like Seyðisfjörður, a remote puffin paradise like Borgarfjörður Eystri, or a scenic stop along the Ring Road, you’re sure to discover why East Iceland ended up being one of our favorite regions in the country.