The Best Places to Live in Portugal & the Cheapest Cities

best cities to live in PortLisbon, Portugalugal

Portugal ranks as Western Europe’s most affordable destination, both for travelling and living. In this post, we’ll look at the cheapest places to live in Portugal with updated living cost estimates. We’ll also highlight five of the best cities for remote workers and digital nomads or just about anyone else looking for a new base. Portugal, which also features in our Europe digital nomad country guides section, has many great options for finding the balance between a high quality of life and affordable living costs.

Table of Contents

5 of the Best Cities to Live in Portugal & Work Remotely

1. Lisbon

Living in Lisbon, Portugal.

Lisbon is one of the most popular cities in Europe for digital nomads and remote workers. For many years, it offered exceptional value in comparison to other major Western European capitals, although that gap has narrowed considerably over the last few years sparking protests over cost of living rises in 2023. Indeed, Lisbon now ranks as more expensive than Madrid, one of the most expensive cities to live in Spain.

Lisbon is a city that boasts an array of intriguing districts set around its hilly centre. From the historic neighbourhood of Alfama, where Fado music still plays out each night in the bars and ancient streets as it has done for at least two centuries, to the party district of Bairro Alto, Lisbon is full of quirky areas and you shouldn’t struggle to find one that suits you.

While not directly on the coast, Lisbon is still very well located, far south enough to enjoy what is mostly a warm climate but with fast rail connections to the north where much of Portugal’s cultural intrigue lies. The capital is also home to the country’s largest airport – perfect for getting to the Portuguese islands or for trips around Europe.

2. Funchal

Cheapest cities to live in Portugal - Funchal

Europe may lack the paradise island charms and year-round warm weather that you find in Southeast Asia for example. Its overall cost factor also makes it a less appealing destination for digital nomads seeking that picture perfect remote lifestyle of hammocks and beaches. However if that’s what you seek and you want to keep the benefits of living in the EU, the Portuguese archipelago island of Madeira might just be your best bet.

Madeira is situated southwest of Portugal in the Atlantic Ocean, to the north of Spain’s Canary Islands and around 600 km to the west of Morocco. Average daily high temperatures fluctuate between 20 and 26°C throughout the year, the kind of year-round warm weather that cannot be found even in Portugal’s southern Algarve region or indeed in any part of mainland Europe.

The Madeiran capital is Funchal, Portugal’s 6th largest city but home to only just over 100,000 residents giving it a manageable size. It has grown into a popular tourist destination over recent decades, particularly at New Year when it stages one of Europe’s most spectacular firework displays, however it remains a relatively affordable place for anyone looking for a longer stay in Madeira.

  • Estimated Living Costs in Funchal – 1000-1500 Euros/month
  • Estimated Digital Nomad costs in Funchal – 1250-2250 Euros/month

3. Porto

Porto is a beautiful city in the north of the country and is one of the most spectacularly set in all of Europe, with the city split in two by the dramatic Douro River estuary.

Portugal’s second largest metropolis is home to around 1.7 million people in its greater urban area. However the city itself can still feel quite sleepy, certainly in comparison to Lisbon and it only really livens up at the weekend. Therefore it may suit those looking for the benefits of living in a big city but with a slightly slower pace of life than you find in the capital.

The cost of living in Porto is less than in Lisbon but it does depend on which neighbourhood you opt for and those happy to live away from the centre in one of the outer suburbs or towns in the Porto area should save more.

It is worth noting though that Porto has a significantly cooler and wetter climate than the other four cities featured in this rundown of the best digital nomad destinations in Portugal.

4. Lagos

Lagos Centrw

If you’re not fussed about city living and are more interested in spending time by the ocean in beautiful surroundings than the town of Lagos on the Algarve Coast may be your best option.

During the summer months, it transforms from a sleepy town of around 20,000 permanent residents into a bustling destination as tourists, backpackers and seasonal residents arrive to enjoy its many beaches and party in its old town which is full of lively bars and restaurants.

This can push prices up for local residents and certainly during the summer months, you are likely to spend more in Lagos than in other destinations, even within the Algarve such as the larger cities of Portimao, Albufeira and Faro. However you can get some bargain accommodation away from the peak tourist season as many home owners only come for the summer and are happy to let their apartments out during the rest of the year at discounted rates.

Our Lagos digital nomad guide highlights some of the main advantages and disadvantages to working remotely from this colourful Algarve town.

  • Estimated Living Costs in Lagos – 1100-1600 Euros/month
  • Estimated Digital Nomad costs in Lagos – 1400-2400 Euros/month

5. Setubal

cheapest places to live in portugal

Setubal is a coastal city located around 50 km south of Lisbon. It’s known for its beautiful beaches and tasty seafood. The city offers a relaxed lifestyle, with a community atmosphere, although you will find fewer foreigners here than in more popular Portuguese digital nomad destinations so it’s a good option for anyone who really wants a more typically Portuguese experience.

Highlights include its stunning natural surroundings. The city is situated between the Sado Estuary Natural Reserve and the Arrabida Natural Park which brings with it many opportunities for outdoor activities such as hiking, cycling, and water sports. While it is very much a city, this makes it a good option for those who really want to get out and enjoy an outdoors lifestyle.

The local cuisine in Setubal is another major highlight. This affordable city is famous for its fresh seafood, particularly “choco frito” (fried cuttlefish). There are also plenty of traditional restaurants where you can enjoy delicious Portuguese dishes and pastries in a more authentic setting than you might find in more touristic destinations.

  • Estimated Living Costs in Setubal – 950-1450 Euros/month
  • Estimated Digital Nomad costs in Setubal – 1200-2200 Euros/month

Estimated Living Costs Calculation Explained:

The estimated living costs in Portugal featured in this post are designed to cover all the living expenses including the cost of renting accommodation and were updated in late 2023. It assumes you are staying in the city for at least one year. If you’re a digital nomad, planning a shorter stay of just a few months or less, you’ll want to budget more, mostly to account for the higher cost of short to mid-term accommodation.

The lower figure in the ranges given should cover the cost of renting a room in a shared flat. It might be a realistic budget for students or remote workers focused on cutting costs where possible and living cheaply whilst still trying to enjoy a relatively active social life.

Portuguese pastries
Pastel de natas – cheap and tasty Portuguese snacks that are found all over the country.

The higher figure should cover the cost of one person renting a private apartment or studio and a slightly higher standard of living. However everybody’s idea of a ‘normal lifestyle’ is different and there are always ways to spend more money! If you’re looking for a top of the range apartment in a good area, whilst regularly eating and drinking out, you can expect to spend significantly more than even the upper figure.

We have used Portuguese living cost data from Numbeo as a guide when forming the estimations. You may also need to factor in the cost of health or travel insurance which will depend on your age/circumstances.

Moving to Portugal – Useful Resources

  • Find the cheapest fares on flights to Portugal by using Skyscanner, Europe’s best flight comparison site.
  • The level of English in Portugal is reasonably good and higher than in neighbouring Spain for example. However, learning the lingo or at least some basics will help you get settled much quicker. Consider doing an online Portuguese course with Rosetta Stone before heading to Portugal.
  • Meetup is a great tool for finding a vast range of different social events that will help you meet people and make friends when you first move to Portugal.
  • While Portugal has a fairly good rail and bus network, anyone moving to smaller towns or rural areas may need a car to get about. Discover Cars have good daily rates for renting a car in Portugal with the option to collect from all the major airports.

What are the Cheapest Cities to Live in Portugal?

CityEstimated Cost of Living (Monthly in Euros)
Ponta Delgada900-1400
These Portugal living cost estimates were last updated in October 2023.

The cost of groceries, eating and drinking out and other activities, are fairly consistent across Portugal with a few of the more touristic places slightly more expensive as you’d expect.

The main difference maker in determining the cheapest cities to live in Portugal is the cost of renting accommodation. This is significantly higher in Lisbon than the rest of the country and despite rising living costs, you can still find some exceptionally cheap apartments in some of the smaller towns and cities.

There have been some notable changes in living costs and trends in Portugal since the pandemic period. Funchal has been a big mover with property price rises of more than 20% in one year reported which has a knock-on impact on rents and contributes to the island city now being as expensive as anywhere outside of Lisbon which was not the case three years ago.

As you can see from the table, if cutting costs and saving money is your main priority, then Coimbra, Aveiro and Portimao are among your best options. You can still find great value in the Algarve region and if you’re willing to live in smaller towns and villages, you can find even cheaper places to live in Portugal than the cities featured above.

The Best Places to Live in Portugal & the Cheapest Cities

Mark is a freelance writer currently based in Madrid, Spain. He writes about travel and football and has visited most countries in the EU. He has lived and worked remotely from various cities across Iberia.

4 thoughts on “The Best Places to Live in Portugal & the Cheapest Cities

  1. What I found when looking for an apartment in mid 2021 was money hungry landlords asking for a years rent in advance. This was regardless of proof of income and even bank statements to back it up! I found this to be the case in all major urban areas from Lagos to Braga. I dealt with the mainstream estate agents such as Remax.
    At the moment I’m in a flatshare in Lisbon, but getting a place of my own looks like it’s going to be really tough. Good luck to anyone that wants to give it a go.
    A. R.

  2. For two people, the rent in Porto is high. We prefer 2-3 bedrooms with 2 bathrooms and the places that are not as nice start at €1,000 Euros per month and can easily go up to €2,000 per month.

    1. It seems Portugal prices are really in flux. Probably going to miss the boat due to timing but very much enjoying my visit.

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