Laugarbakki is a young village with around 80 inhabitants and it lies close to the river Mišfaršarį, which used to be known as Langafit. As told in the Saga of Grettir the Strong horse fights took place here. Laugarbakki is a geothermal site, which sustains not only this friendly village but also that of Hvammstangi.

A greenhouse, primary school, sports hall and hot pots can all be found at Laugarbakki. An excellent family reunion service is operated there in the summer with a campsite, a community centre, a grocery store and much more on hand. Fishing licenses for the lakes and rivers at Arnarvatnsheiši can be obtained at Laugarbakki, which is almost like a gate to the highlands.

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