Best VPS for Homelabs in 2026: Free Tiers and Budget Options

Free Tier Comparison

Oracle Cloud: The Best Free Option

Oracle’s Always Free tier is still the most generous free option, with no time limit (as of October 2026):

• AMD option: 2 VMs with 1/8 OCPU + 1GB RAM each
• Arm (Ampere A1) option: 1,500 OCPU hours and 9,000 GB hours a month, which Oracle says equals 2 OCPUs and 12GB RAM running full time on an Always Free account (it used to be 4 OCPUs and 24GB)
• Storage: 200GB total boot and block volume
• Networking: 10TB outbound data transfer per month
• Catches: Always Free resources only exist in your home region, and Oracle reclaims instances that sit idle (under 20% CPU, network and, for Arm, memory use over 7 days)

The Arm instances are the sweet spot. A single VM with 2 Arm cores and 12GB RAM runs Docker and a handful of services comfortably, which beats a lot of entry-level physical hardware.

# Example: What you can run on Oracle Free Tier ARM
# 2 OCPU, 12GB RAM VM

Docker containers:
- Nginx Proxy Manager
- Uptime Kuma
- Vaultwarden
- Nextcloud
- Ollama (small models only: CPU, 2 cores, slow)
- n8n workflows

All for £0/month.

Budget VPS Options (£3-10/month)

When free tiers aren’t enough, these budget options offer excellent value:

DigitalOcean

• Basic Droplet: 1 vCPU, 1GB RAM, 25GB SSD – $6/month
• Regular Droplet: 1 vCPU, 2GB RAM, 50GB SSD – $12/month
• Excellent documentation and community
• Simple, predictable pricing
• One-click apps for common services

Hostinger VPS

• KVM 1: 1 vCPU, 4GB RAM, 50GB NVMe – £4.99/month on a 24-month term, renewing at £10.99/month
• KVM 2: 2 vCPU, 8GB RAM, 100GB NVMe – £6.99/month on a 24-month term, renewing at £12.99/month
• Strong RAM-per-pound at the promotional price; compare the renewal price too
• Data centres in Europe, North America, Asia and South America

Disclosure: ReadTheManual itself is hosted on Hostinger’s managed WordPress hosting (not their VPS). There are no affiliate links on this page.

Hetzner Cloud

• CX23: 2 vCPU (Intel/AMD, shared), 4GB RAM, 40GB NVMe – €5.49/month
• CAX11: 2 Arm vCPU, 4GB RAM, 40GB NVMe – €5.99/month
• Prices exclude VAT, add €0.50/month for a public IPv4 address, and are as of August 2026. Hetzner raised cloud prices twice in 2026 (April and June); the older CPX11 is no longer sold in Europe and the AMD CPX line now costs far more, so check before you buy
• Data centres in Germany and Finland, plus the US and Singapore
• Still strong performance-per-euro
• Hourly billing available

Vultr

• Cloud Compute: 1 vCPU, 1GB RAM, 25GB SSD – $5/month
• High Frequency: 1 vCPU, 1GB RAM, 32GB NVMe – $6/month
• Global data centre coverage
• Bare metal options available for scaling up

Setting Up Your Cloud Homelab

Initial Setup Checklist

# 1. Create your VM with your chosen provider
# 2. SSH in and update the system
sudo apt update && sudo apt upgrade -y

# 3. Create a non-root user
sudo adduser yourusername
sudo usermod -aG sudo yourusername

# 4. Set up SSH key authentication
ssh-copy-id yourusername@your-vm-ip

# 5. Disable password authentication (after confirming key login works)
# Use a drop-in: many cloud images ship /etc/ssh/sshd_config.d/50-cloud-init.conf
# with "PasswordAuthentication yes", which overrides an edit to sshd_config
echo "PasswordAuthentication no" | sudo tee /etc/ssh/sshd_config.d/00-hardening.conf
sudo sshd -t && sudo systemctl restart ssh   # the unit is "ssh" on Ubuntu/Debian

# 6. Install Docker
curl -fsSL https://get.docker.com | sh
sudo usermod -aG docker yourusername

# 7. Install Docker Compose
sudo apt install docker-compose-plugin

Essential Security Steps

# Enable UFW firewall
sudo ufw allow OpenSSH
sudo ufw allow 80/tcp
sudo ufw allow 443/tcp
sudo ufw enable

# Install fail2ban
sudo apt install fail2ban
sudo systemctl enable fail2ban

# Keep system updated automatically
sudo apt install unattended-upgrades
sudo dpkg-reconfigure -plow unattended-upgrades

Connecting Cloud to Local

Hybrid setups combine cloud VPS with local hardware:

• VPN tunnel: WireGuard or Tailscale connects your cloud VPS to your home network
• Reverse proxy: Cloud VPS handles ingress, proxies to local services
• Monitoring: Cloud-hosted Uptime Kuma monitors both cloud and local services

# Quick WireGuard setup on cloud VPS
sudo apt install wireguard

# Generate keys
wg genkey | tee privatekey | wg pubkey > publickey

# Configure /etc/wireguard/wg0.conf
[Interface]
Address = 10.0.0.1/24
PrivateKey = YOUR_PRIVATE_KEY
ListenPort = 51820

[Peer]
PublicKey = HOME_SERVER_PUBLIC_KEY
AllowedIPs = 10.0.0.2/32, 192.168.1.0/24

# Start WireGuard
sudo wg-quick up wg0
sudo systemctl enable wg-quick@wg0

Cloud Homelab Project Ideas

Project 1: Public-Facing Web Services

• Nginx Proxy Manager with Let’s Encrypt SSL
• Personal website or portfolio
• Self-hosted blog or wiki

Career translation: “I deploy and manage public web services with proper TLS configuration and reverse proxy architecture.”

Project 2: Monitoring Stack

• Uptime Kuma for availability monitoring
• Grafana + Prometheus for metrics
• Alerting via Discord, Slack, or email

Career translation: “I implement observability solutions with dashboards and alerting.”

Project 3: Multi-Region Deployment

• VMs in different regions (needs a paid account or a second provider: Oracle’s Always Free resources are limited to your home region)
• DNS-based failover
• Distributed service architecture

Career translation: “I design and implement distributed systems with geographic redundancy.”