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 and 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, has many great options for finding the balance between a high quality of life and affordable living costs.

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

1. Lisbon

cheapest cities in Portugal
Lisbon street via David Marcu on Wunderstock

Lisbon is one of the most popular cities in Europe for digital nomads and remote workers. Unlike almost all other Western European capitals, it boasts quite a low cost of living. While it is still the richest and most expensive city in Portugal, those looking to live on a tight budget, should be able to get by on less than 1000 Euros.

Increase that a bit and you can really start to enjoy a great lifestyle in Lisbon, 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.

Estimated Living Costs in Lisbon (see below for living cost explanation) – 850-1350 Euros/month

2. 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 an affordable place for anyone looking for a longer stay in Madeira.

Estimated Living Costs in Funchal – 750-1050 Euros/month

3. Porto

best places to live in Portugal

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 marginally 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 article.

Estimated Living Costs in Porto – 800-1150 Euros/month

4. Lagos

If you’re not fussed about city living and 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 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.

For more info, check out our Lagos digital nomad guide which highlights some of the main advantages and disadvantages to working remotely from the Algarve.

Estimated Living Costs in Lagos – 800-1250 Euros/month

5. Setubal

cheapest places to live in portugal

If you’re tempted by Lisbon but want a slightly nicer apartment at a better rate than you’ll find in the capital, then Setubal is a pretty good alternative option.

Setubal is very much a Portuguese city without the international vibe of somewhere like Lisbon or Lagos. Depending on what you’re looking for, that may be a positive or a negative but the level of English is pretty good across Portugal so you shouldn’t feel like a total stranger in the city even if you don’t speak Portuguese.

It has many advantages with a coastal location and fast ferry connections from the heart of the city to the Península de Troia – a long stretch of largely deserted sandy beaches. You can also reach Lisbon by rail in just under an hour meaning it’s possible to live in Setubal but still enjoy regular evenings or days out in Lisbon.

Estimated Living Costs in Setubal – 800-1050 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. 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 and will be renting off Airbnb, then you might want to add around 10-20% to the suggested budgets to cover the higher cost of shorter 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.

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 cover insurance which will depend on your age/circumstances.

What are the Cheapest Cities to Live in Portugal?

The following table shows the estimated cost of living in 12 cities in Portugal (including the cost of renting accommodation):

CityEstimated Cost of Living (Monthly in Euros)
Ponta Delgada750-1000

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, although still very reasonable by the standards of a major European capital. You can find some exceptionally cheap apartments in some of the smaller towns and cities.

As you can see from the table above, if cutting costs and saving money is your main priority, then Leiria, Aveiro and Portimao are among your best options. These are three cities located in different parts of the country and if you’re willing to live somewhere even smaller, you can find even cheaper places to live in Portugal, in just about any part of the country.

The Best Places to Live in Portugal & the Cheapest Cities

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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