Borgarnes isn’t the most exciting place in itself, but it’s a natural stopping point when heading to or from Reykjavik. There’s a hotel as well as a hostel, but we had better and cheaper luck via AirBnB
The bus trip to or from Reykjavik is beautiful, particularly if you can time it to either sunrise or sunset
The museums are both fun and kind of spooky. The nice woman at the folk museum enjoyed seeing how the tourists responded to the local ghosts.