8. Shalimar – Pakistani Cuisine
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Best for: Authentic Pakistani flavors and halal dining
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Average price level: Lunch menu items typically range from 2,600 to 3,000 ISK (19–22 USD)
Shalimar opened in 2001 and has been a quiet fixture in downtown Reykjavik ever since, winning over locals and visitors with straightforward, honest Pakistani cooking. The room is warm, the welcome genuine, and the classics — chicken tikka masala, lamb saagwala, biryani, tandoori naan fresh off the heat — are exactly what you want them to be.
The kitchen makes its own spice blends, and it shows. The flavors are layered in a way that shortcuts simply can’t produce. At lunch, the set menus and combo plates are the move: generous portions at prices that make the whole thing feel almost unreasonably good value.
Shalimar is one of the more reliable budget lunch spots in the city center. The halal menu means it works for a wider range of diners too, which is worth knowing if you’re traveling in a mixed group.
Shalimar – Customer Ratings
Shalimar – Opening Hours
Shalimar – Address
7. Grandi Mathöll
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Best for: A diverse array of street food
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Average price level: Around 2,500 ISK (18 USD)
Grandi Mathöll opened in 2017 inside a converted fish factory by the harbor, and the transformation is genuinely impressive. The industrial bones are still there — high ceilings, concrete, the odd reminder of the building’s past life — but the atmosphere now is lively, casual, and easy to spend an afternoon in.
The stalls cover a lot of ground: Icelandic lamb and fresh seafood sit alongside Italian pasta, burgers, and tacos. The Indonesian and Indian stalls in particular are worth seeking out — the portions are solid and the flavors don’t pull any punches.
The fish and chips have built up a following among locals, and rightly so. The batter is properly crispy, and the fish is as fresh as you’d expect this close to the harbor. If you’re after one of the better-value meals in the city, Grandi Mathöll is a dependable answer.
Grandi Mathöll – Customer Ratings
Grandi Mathöll – Opening Hours
Grandi Mathöll – Address
6. Krua Thai
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Best for: Pad Thai and flavorful Thai curries
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Average price level: Approximately 3,400 ISK (24 USD)
Krua Thai sits near Hallgrimskirkja Church, and on a cold evening you can often catch the smell of frying noodles and curry from the street — which is pretty much all the persuasion you need. Pad Thai, green curry, fried rice: the menu sticks to what it does well, and the portions are big enough that sharing is a reasonable option, though you may not want to.
On a particularly bitter Reykjavik night, the tom yum soup earns its reputation. It’s warming without being overwhelming — just the right amount of heat.
The lunch specials bring the price down to something very manageable, and the takeaway service is efficient if you’re short on time. Krua Thai doesn’t try to be anything other than what it is, and that’s exactly why it works.
Krua Thai – Customer Ratings
Krua Thai – Opening Hours
Skolavordustigur Branch:
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Monday – Friday: 11:30 AM – 9:30 PM
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Saturday: 12:00 PM – 9:30 PM
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Sunday: 5:00 PM – 9:30 PM
Krua Thai – Address
5. Arabian Taste
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Best for: Shawarma and kebabs
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Average price level: Wraps start from ~2,000 ISK; plates range from ~2,700 to ~2,900 ISK
Arabian Taste arrived in 2021 and wasted little time building a reputation. For Middle Eastern food in Reykjavik at prices that won’t hurt, it’s hard to beat.
The restaurant is on Laugavegur and is family-run. The focus is Syrian cooking — chicken and lamb shawarma, kebabs, Arabic plates — made with fresh ingredients and spiced properly. Nothing here feels like it’s been toned down for a nervous palate.
Reviews consistently point to the warm service and generous portions as much as the food itself. The Chicken Doner, the Arabian Mix, and the shawarma platters with rice and salad get mentioned most. The fries are crispy, the hummus is fresh, and more than a few reviewers have called it the best Arabic food they’ve had anywhere.
Two other places worth knowing about: Mandi has become a reliable late-night spot downtown for shawarma, falafel, and hummus at low prices. Lamb Street Food takes a slightly different angle, pairing local Icelandic lamb with flatbreads, skyr, and Middle Eastern spices — an Icelandic twist that actually makes sense.
Arabian Taste – Customer Ratings
Arabian Taste – Opening Hours
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Monday to Thursday: 10:00 AM – 11:00 PM
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Friday: 10:00 AM – 2:00 AM
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Saturday: 11:00 AM – 2:00 AM
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Sunday: 11:00 AM – 11:00 PM
Arabian Taste – Address
4. Icelandic Street Food
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Best for: Bottomless lamb and tomato soup refills
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Average price level: About 3,000 ISK (21 USD) for refillable bread-bowl soup
Few things make more sense in Reykjavik than a steaming bowl of lamb soup, and Icelandic Street Food has that particular comfort covered.
The menu is short and deliberate. There’s the Fisherman’s Favorite fish stew, a spicy tomato soup, and the unlimited-refill meat and shellfish soup, all served with fresh bread. It’s the kind of food that requires no explanation and no effort to enjoy.
The complimentary waffles with jam at the end are a small touch that regulars look forward to. Simple, yes — but they land every time.
Icelandic Street Food – Customer Ratings
Icelandic Street Food – Opening Hours
Icelandic Street Food – Address
3. IÐNÓ
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Best for: Coffee and lamb soup
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Average price level: Approximately 2,800 ISK (20 USD)
IÐNÓ has been standing since 1897, which gives it a certain weight that newer cafés simply can’t manufacture. It’s been a theater, a meeting hall, and now a café — each chapter visible in the fabric of the place if you look closely enough.
It sits right next to Tjornin Pond, so the views are good, and it’s easy to lose twenty minutes watching the ducks when you meant to check your phone.
The lamb soup with bread is the thing to order on a cold day, and most days in Reykjavik qualify. The cakes are hard to resist, and the coffee is strong enough to matter. For a downtown café, the prices are noticeably reasonable — enough so that it’s worth lingering rather than rushing off.
IÐNÓ also works well as a pre-evening starting point. Good food, a relaxed drink, and then you’re well-placed for some of the city’s better bars nearby.
IÐNÓ – Customer Ratings
IÐNÓ – Opening Hours
IÐNÓ – Address
2. Hamborgarabullan (Tommi’s Burger Joint)
Tommi’s Burger Joint has been part of Reykjavik since 1981. When it opened, Tommi expected to sell around 250 hamburgers over the opening weekend. He sold 1,000 on day one. The rest, as they say, is history — and it’s the kind of history that keeps repeating itself, because people keep coming back.
The walls are covered in concert posters, vinyl records, and children’s drawings. It’s relaxed, unpretentious, and the burgers are exactly what you want from a place like this. The “Offer of the Century” — a classic Tommi burger, fries, and a soda — is the default order for most regulars, though the beef steakburger is a worthy step up. The brand has since spread to the UK, Germany, and Denmark, but the Geirsgata location in Reykjavik remains the one that matters most to locals.
Two other spots worth a mention: 2Guys focuses on smashburgers in a casual bar setting, pitched at mid-range prices. Metro is the homegrown fast-food option — Iceland’s answer to McDonald’s, essentially, and a solid choice when you want something quick and cheap.
Hamborgarabullan (Tommi’s Burger Joint) – Customer Ratings
Hamborgarabullan (Tommi’s Burger Joint) – Opening Hours
Hamborgarabullan (Tommi’s Burger Joint) – Address
1. Baejarins Beztu Pylsur
Baejarins Beztu Pylsur has been doing one thing since 1937, and it has never needed to do anything else. The hot dogs are the reason people come, the reason they come back, and by most accounts the best you’ll find in Iceland.
The recipe is a blend of lamb, pork, and beef — a combination that sounds unremarkable until you actually eat one. The toppings are what make it.
Order “one with everything” — “eina með öllu” — and you get sweet brown mustard, remoulade, ketchup, raw onions, and crispy fried onions all at once. Bill Clinton famously ordered his without the onions. Kim Kardashian has visited too. Neither of them is the benchmark here; the hot dog itself is. Delivery is now available across Reykjavik through the usual apps, if you’d rather skip the queue.
For the absolute cheapest hot dog in the area, IKEA’s Bistro near Reykjavik is hard to argue with — there’s a vegan option there too. Víkinga Pylsur near Hallgrimskirkja is worth a stop if you want something more creative: pulled meats, decent vegan choices, and a bit more going on. And if you’re after something nostalgic and no-fuss, Hagavagninn by Vesturbaejarlaug Pool does simple burgers and a bean patty option in a setting that feels pleasantly stuck in time.
Bæjarins Beztu Pylsur – Customer Ratings
Bæjarins Beztu Pylsur – Opening Hours
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Sunday – Wednesday: 9:00 AM – 1:00 AM
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Thursday: 9:00 AM – 2:00 AM
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Friday – Saturday: 9:00 AM – 6:00 AM
Bæjarins Beztu Pylsur – Address
FAQs About Affordable Restaurants in Reykjavik
Here are some frequently asked questions regarding affordable dining in Reykjavik.
What are the best cheap restaurants in Reykjavik?
The best budget-friendly establishments in Reykjavik are conveniently located in the city center. Notable mentions include Icelandic Street Food, offering unlimited soup refills; Tommi’s Burger Joint for classic burgers; and Bæjarins Beztu Pylsur, renowned for its famous Icelandic hot dog. These affordable eateries enjoy popularity among both travelers and locals alike.
What is the average meal price in Reykjavik?
A casual dining experience in Reykjavik typically ranges from 18 to 32 USD, while a three-course dinner at a mid-range restaurant can set you back anywhere from 43 to 71 USD per person.
Is it easy to find cheap food in Reykjavik?
Indeed. Although Iceland is noted for its high prices, Reykjavik offers numerous budget-friendly food options, from hot dog stands to casual burger joints and multi-cuisine food halls.
Is it cheap to eat out in Iceland?
Dining out in Iceland can be pricey; however, many budget-conscious choices such as fast-casual eateries, street food vendors, and burger joints make it possible to enjoy good-quality meals for less.
As a customer of Guide to Iceland, don’t overlook your exclusive VIP Club discounts available at restaurants, cafes, bars, and more.
What is the cheapest food in Reykjavik?
The most economical food option in Reykjavik is often the famed hot dog from Bæjarins Beztu Pylsur, priced around 800–850 ISK. Alternatively, you can find low-cost hot dogs at IKEA’s food court, popular for budget dining. Additional affordable options include pastries from local bakeries, shawarma from Arabian Taste, and flavorful Thai dishes at Krua Thai.
What are the best places to eat in Reykjavik for lunch?
When it comes to lunch options in Reykjavik, consider Caruso for Italian delights, Grandi Mathöll for an eclectic food hall experience, and Pitan for stuffed pita creations.
Where to go for dinner in Reykjavik?
For a casual and budget-friendly dinner, head to Icelandic Street Food for hearty local fare, or try 2Guys for smashburgers. If an upscale experience is desired, look to Caruso for a cozy Italian ambience or IÐNÓ for a dining experience steeped in history.
What are the best casual restaurants in Reykjavik?
Among the best casual dining experiences in Reykjavik are Hamborgarabulla Tomasar for delightful smashburgers (Tommi’s Burger Joint) and Grandi Mathöll for a myriad of international food stalls. Perfect for groups or laid-back meals, these spots embody the relaxed dining vibe Reykjavik is known for.
Are there affordable vegetarian and vegan restaurants in Reykjavik?
Certainly. Grandi Mathöll features stalls offering vegan and vegetarian dishes, IKEA serves up vegan Swedish meatballs, and Víkinga Pylsur near Hallgrimskirkja presents a plant-based hot dog. For further options, refer to our comprehensive vegan and vegetarian guide for Reykjavik.
What food is Reykjavik known for?
Reykjavik is celebrated for its tender Icelandic lamb, fresh seafood, and iconic traditional dishes like fermented shark and dried fish.
Where To Find the Best Cheap Eats in Reykjavik
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Reykjavik has a reputation for being expensive, and it’s not entirely undeserved. But budget dining here is more available than people expect — you just need to know where to look. The map above marks every location in this list.
The city’s food scene covers a lot of ground, from Icelandic classics to Pakistani, Thai, Middle Eastern, and everything in between. Whether you want something quick between sights or a proper sit-down meal that won’t clean out your wallet, there are good options across the board.
The map is also useful for planning where to stay. Pick accommodation within walking distance of a few of these spots, and you’ll have an easy answer waiting for you at the end of a long day out — whether that’s a day around the city or returning from one of the many day trips from Reykjavik.
Have you experienced any of these affordable dining gems in Reykjavik? Is there a favorite budget-friendly spot we might have overlooked? We’d love to hear your recommendations and stories in the comments below!
