South America is often seen as one of the world’s more affordable regions to live in. 

But new data suggests the cost of living can vary significantly depending on where you are.

According to 2025 data from Numbeo, Paraguay is the most affordable country in South America when comparing the combined cost of living and rent, while Uruguay is the most expensive.

NOTE: For this comparison, a combined score was calculated by adding Numbeo’s Cost of Living Index and Rent Index for each country. While this combined figure is a derived metric rather than an official Numbeo index, it provides a useful way to compare overall living costs across the region.

TL;DR

• Paraguay has the lowest combined cost of living and rent among the 10 South American countries analyzed.
• Uruguay ranks as the most expensive, with a combined score nearly twice that of Paraguay.
• The data shows affordability varies widely across South America rather than following a single regional trend.

Paraguay Leads on Affordability

Paraguay records the lowest combined score at 31.6, followed closely by Brazil at 32.8, Bolivia at 33.5, and Colombia at 34.1.

At the other end of the ranking is Uruguay with a combined score of 58.8, making it the most expensive country in the dataset by a considerable margin.

The difference is striking. Uruguay’s combined score is 27.2 points higher than Paraguay’s, indicating its overall cost measure is about 86% higher than that of the region’s most affordable country in this comparison.

Chile and Argentina also rank among the most expensive countries, with combined scores of 45.7 and 45.6, respectively. 

In fact, only 0.1 point separates the two, making them virtually identical in this measure.

The rankings illustrate that affordability is not evenly distributed across the continent. Instead, countries tend to cluster into lower-cost, middle-cost and higher-cost groups.

Brazil emerges as one of the region’s cheaper options

One of the more surprising findings is Brazil’s position near the top of the affordability rankings.

Despite being South America’s largest economy and home to major cities such as São Paulo and Rio de Janeiro, Brazil records the second-lowest combined score in the dataset.

Its relatively low Rent Index of 7.2 plays an important role in keeping its overall score down.

Meanwhile, countries such as Ecuador, Peru and Venezuela sit in the middle of the rankings, reflecting moderate overall costs compared with their regional neighbors.

Living Costs Tell a Bigger Story Than Rent

Housing is often one of the largest household expenses, but the figures show that rent is only part of the affordability picture.

Uruguay not only has the highest Rent Index at 12.5 but also the region’s highest Cost of Living Index at 46.3.

Venezuela presents an interesting contrast. 

It has the lowest Rent Index in the dataset at 5.8, yet its combined score reaches 41.7 because its everyday living costs remain comparatively high.

This highlights an important point: low rent does not automatically make a country inexpensive overall. Food, transport, utilities, restaurants and other daily expenses also shape the total cost of living.

For anyone considering relocation, retirement, remote work or long-term travel, looking at rent alone may not provide the full picture.

ELI5

Not every country in South America costs the same to live in. Paraguay is the cheapest in this comparison, while Uruguay is the most expensive. The data also shows that rent is only one part of the picture—everyday costs like food, transport, and utilities can make a country more or less affordable overall.

Sources: 

Numbeo | Mercer Insights