Madrid is Spain’s capital and largest city and is located in the heart of the Iberian Peninsula.
This great city is more than 600 meters above sea level, making it one of Europe’s highest capitals.
Deciding where to stay in Madrid for cheap depends on your personal tastes, the reason for your trip and your budget.
Centro District is the best choice if your budget is somewhat flexible and you want to be near the main attractions. See all accommodations in Distrito Centro ordered by price.
Suppose you don’t mind being far from the city center (Madrid has an excellent public transport system). In that case, we recommend looking at accommodation in the most peripheral neighborhoods, where costs are usually lower and quality higher. See accommodation in all of Madrid ordered by price.
To save even further, you can choose to stay in neighboring towns close to Madrid. See accommodation in Madrid province.
The Spanish capital is a tourist destination notable for its infinite cultural offer, among which its more than 60 museums stand out. Extensive world-renowned art galleries such as El Prado Museum, Thyssen-Bornemisza, or Reina Sofía make up only a tiny part of its many historical, architectural, and artistic attractions.
Madrid’s nightlife is legendary and attracts thousands of tourists each year. Districts such as Malasaña and Chueca are home to many of the Spanish capital’s most iconic bars and clubs.
Apart from its nightlife, Madrid is also a foodie’s paradise. Districts such as La Latina, Lavapiés, or Las Letras are the go-to places for local and international food.
Regarding shopping, Gran Vía (Madrid’s most important shopping street) is the place to go.
Madrid has a very efficient metro system connecting many of its neighborhoods, so moving from one place to another is easy.
Keep Reading About Madrid…
Table of Contents
Where to Stay in Madrid on a Budget – Summary of the Cheap Areas to Stay in Madrid
This is a summary of the cheapest areas to stay in Madrid.
If you continue reading the article, you will find an in-depth description of each neighborhood we have included in this guide to where to stay in Madrid on a Budget.
- Cheap and central areas: Lavapiés & La Latina
- Absolute cheapest areas to stay in Madrid: Vallecas, Tetuán and Carabanchel – Latina
- Cheap and well-connected area: Arganzuela (Atocha & Madrid Río)
- Cheap areas around Madrid: Leganés, Getafe, Alcalá de Henares
- Area with frequent deals: Centro de Madrid
- Absolute best area to stay: Around Gran Vía
Madrid Hotel Map
Booking.comCheap Hostels in Madrid
- Sungate ONE – Highly rated hostel near Puerta del Sol.
- Gran Via Open Hostel – Hostel with terrace located in the best area for tourists in Madrid.
- Far Home Atocha – Budget hostel near Atocha train station.
Cheap B&Bs & Guest Houses in Madrid
- Fuencarral Kryse – Economic pension in the heart of Madrid.
- Hostal Abami II – B&B located in the lively Malasaña district.
- Hostal Abril Madrid – Located in Chueca, a few meters from Gran Vía.
The Cheapest Areas to Stay in Madrid, Spain
1. Lavapiés & La Latina – Cheap and Central areas
The neighborhoods of La Latina and Lavapiés are located southwest of the Historic Center and are not only two of the cheapest areas to stay in Madrid, but they are also two of the liveliest neighborhoods in the Spanish capital.
Lavapiés is the most multicultural neighborhood in the Spanish capital. It is estimated that people of up to 88 different nationalities live in this small corner of Madrid and it is not difficult to hear languages such as Arabic, French, Urdu, or Mandarin on its streets.
In recent years, Lavapiés has positioned itself as one of Madrid’s hotspots, a new hipster epicenter that rivals the traditional alternative districts of Malasaña and Chueca.
Lavapiés is also one of the cheapest neighborhoods in Madrid, where you can taste Spanish, Arabic, Indian, or African cuisine.
The neighboring area of La Latina is a maze of small alleys full of tapas, bars, and tascas.
The neighborhood’s landmarks are the Basilica of San Francisco el Grande, with its murals made by Goya himself, and the imposing Moorish church of San Pedro el Real.
Every Sunday, crowds fill the market at El Rastro (between Calle Embajadores and Ronda de Toledo) to later eat at the many cafes and street food stalls in the area.
As for cheap, central, and well-connected areas, few neighborhoods in Madrid can compete with the benefits of Lavapiés and La Latina.
Selected accommodation in this area of Madrid
- Best hostel: Ok Hostel Madrid
- Best B&B: Hostal Tirso Plaza
- Best budget hotel: ibis budget Madrid Centro Lavapies
2. Distrito Centro – A great area with frequent deals
One thing that separates Madrid from other major European capitals such as London or Paris is that, although the city center does house the most expensive hotels, it is also possible to find frequent deals, especially during the low season.
This is primarily because the Centro district has the broadest range of hotels in Madrid and, with higher competition, many establishments lower their fares in order to fill rooms.
Needless to say, the city center is the best area to stay in Madrid. Suppose you decide to stay in this area. In that case, you will be a few steps (or a few metro stops) from places such as Plaza Mayor, Gran Vía, the Royal Palace, Cibeles fountain, or the Art Triangle (the area that houses El Prado, Thyssen-Bornemisza, Reina Sofía Art Center, and the Caixa-Forum Madrid).
The Centro district is divided into six neighborhoods with different flavors and personalities.
First, occupying the historical and geographical heart of Madrid is Sol. How could it be otherwise? The heart of this area is the Puerta del Sol.
Sol, in addition to the gate that gives it its name (and is actually a square), concentrates the main historical tourist attractions of the Spanish capital, such as the Barrio de los Austrias, Plaza Mayor, the Bear statue, and the gorgeous buildings south of Gran Vía.
To the west of Sol is Palacio, which stands out for the imposing Royal Palace, the Madrid Opera, and the Almudena Cathedral.
In the east section of the Centro district, we find Cortes, which houses the lively Las Letras neighborhood, the Paseo de El Prado, the Neptune Fountain, the Congress, the Cibeles Fountain, and the Palace of Fine Arts.
To the north of Gran Vía, you can find the liveliest neighborhoods with the best nightlife in the city.
On the one hand, there is the Universidad neighborhood, which broadly occupies the space of the historic neighborhoods of Malasaña and Conde Duque and is currently the alternative neighborhood par excellence of Madrid, full of shops, cafes, bars, and clubs.
Across the street from Fuencarral is the Justicia (or Chueca) district, a lively historic neighborhood, the epicenter of Madrid’s LGBT community.
Finally, the neighborhood of Embajadores, at the southern end of the center, is home to the Lavapiés and La Latina areas.
Centro district is one of the cheapest areas to stay in Madrid if you know how to look for deals.
Selected accommodation in this area of Madrid
- Best hostel: Bastardo Hostel Madrid
- Best B&B: Fuencarral Kryse
- Best budget hotel: Room Mate Laura
3. Arganzuela – Central and Well-Connected
The Arganzuela district is located to the south of the Centro district and is the place where the famous Atocha railway station is located.
The neighborhood around Atocha is quite central and is within walking distance of the Paseo de El Prado, the Art Triangle, El Retiro Park, and the Las Letras neighborhood, making it An excellent area to stay close to the artistic attractions of Madrid.
Atocha station is the central railway hub in all of Spain and offers train connections with almost the entire peninsula, making it one of the best areas to stay in Madrid if you plan to travel throughout the country.
The southern area of the Arganzuela district is marked by the presence of the Manzanares River and the extensive river park known as Madrid Río.
This area, previously an industrial area crossed by a super-highway, is today one of the greenest and most atmospheric places in the Spanish capital.
Next to the river, in the Delicias neighborhood, you can find Matadero de Madrid, a modern artistic and business space, very popular with alternative, young people. It is located in the old municipal slaughterhouse.
Selected accommodation in this area of Madrid
- Best hostel: Petit Hostel
- Best B&B: Hostal CC Atocha
- Best budget hotel: Hotel Sancho
4. Chamartín y Tetuán – Business Area with Cheap Accommodation
Chamartín and Tetuán are located north of Madrid city center, an eclectic district that mixes large residential areas with business developments.
This area is in the sights of the City Council and real estate investors, who seek to turn these districts into the Spanish capital’s new commercial, business, and residential hub.
The impressive Paseo de La Castellana separates the districts of Chamartín and Tetuán, the most important road artery in Madrid, which concentrates many shops, business centers, office skyscrapers, and some of the most sought-after residential buildings in the capital.
La Castellana is perhaps most famous for hosting the Santiago Bernabéu Stadium. Home of the Real Madrid football club.
In the north of this area is the Chamartín station, the city’s second most important railway station and the main connection point between the capital and the north of the Peninsula.
In terms of costs, this large area offers very varied accommodation; while the area around La Castellana offers many intermediate and luxury options, the Tetuán district has cheaper options.
The best part is that, although it is not the most central area, Madrid Norte has many metro, train, and light rail connections. Additionally, its proximity to the airport makes it an excellent cheap area to stay in Madrid on a stopover.
Selected accommodation in this area of Madrid
- Best hostel: Far Home Bernabéu
- Best B&B: Hostal Falfes
- Best budget hotel: Érase un Hotel
5. Other Cheap Areas to Stay in Madrid
Madrid is a huge city with an extensive hotel offer. Above we show you the main cheap areas to stay in Madrid, however, we recommend that you do not lose sight of these other areas where you may, with some luck, be able to find accommodation deals in Madrid.
- Barajas: Better known for being the host neighborhood of the Adolfo Suárez International Airport, this district, previously an independent town, also hosts attractions such as Parque el Capricho or the IFEMA convention center. The area is connected to the center through metro lines 5 and 8. See accommodation in Barajas.
- Vallecas: Although many consider it a separate city, Vallecas is officially one of the districts that make up Madrid. This working-class area has a special atmosphere and offers plenty of inexpensive bars and restaurants. It is connected by metro line 1 and several commuter lines. See accommodation in Vallecas.
- Carabanchel & Latina: This residential area, located southwest of the capital, offers an alternative to the frenzy of central Madrid. To get around, this area has metro lines 4 and 5, as well as suburban trains. See accommodation in Carabanchel – Latina.
Please note: When looking for cheap accommodation in Madrid, remember that the word ‘hostal’ means inn or pension and not hostel. Shared accommodation establishments in Madrid are called albergues.
Where to Stay in Madrid on a Budget: Important Information
Madrid has it all in terms of accommodation, from five-star hotels to small-budget B&Bs, to boutique-style establishments, backpacker hostels, and business hotels.
The costs of accommodation in Madrid are among the highest in Spain. However, they remain cheap when compared to other European cities such as Paris or London.
High, medium, and low seasons in Madrid
Let’s start with the good news: Although Madrid is becoming a tourist destination to visit at any time of the year, there are still three more or less differentiated tourist seasons.
Please note that these tips are for guidance only and are basically useless during major city events. Finding accommodation in Madrid during Gay Pride, sporting events (including Real Madrid matches) or during Christmas or Easter is still a difficult task.
The low season coincides with the end of autumn and all winter (mid-November to the beginning of March), excluding the period between December 15 and January 8 (Christmas). During this time you can find the cheapest prices in the city, even in the center. Yes, it is cold, but it is usually a dry cold that rarely brings snowfall or freezing temperatures.
The mid-season occupies autumn and spring and is the best time to visit Madrid.
In spring, parks like El Retiro or El Capricho are at their maximum splendor, temperatures rise around 20 degrees (generally passing 30 in May), and the city acquires color and light that make it magical.
In autumn (September-November), the shades of brown take over the city, and the walks through the center become romantic.
Both autumn and spring are the rainiest seasons in the capital, so an umbrella and appropriate clothing is recommended.
Paradoxically, hotels are fuller and more expensive on weekends during the mid-season. Why? We explain it to you in the next point.
The high season coincides with the summer (June, July, and August), and it is so hot that the city seems deserted. Thermometers at this time reach 40ºC (104ºF).
In high season, the city fills up with international tourists while Madrid residents flee the heat taking advantage of school vacations. Many shops (especially those in the peripheral areas) remain closed during the summer.
Where can I find the cheapest accommodation in Madrid?
If you want to find cheap accommodation in Madrid during the high season, you can always try the city’s outskirts. The Madrid metropolitan area has an excellent commuter transport system with nearby towns, allowing quick and efficient travel with cities such as Alcalá de Henares, Leganés, Fuenlabrada, Parla, etc. See all accommodation in the Community of Madrid ordered by price.
Obviously, if you decide to stay in some of the neighboring areas of Madrid that are not connected by train, chances are you will need to rent a vehicle. You can rent a car here.
