Here are several affordable-but-well-reviewed places in Kandy (a mix of budget guesthouses/hostels and value-for-money hotels). I’ve included one short note about each and a reliable source so you can check reviews/prices:

• Barefoot Inn — friendly, clean guesthouse/hostel with very high value-for-money ratings; quiet hill location a short tuk‑tuk to the lake/temple. (booking.com)
• Senani Hotel — solid mid‑range option (pool, rooftop restaurant), good guest scores for service and value. Good if you want hotel facilities without a big price tag. (booking.com)
• Theva Residency — boutique hillside hotel with excellent views and service; a bit pricier than a guesthouse but often good value for the quality. (booking.com)
• Melheim Kandy Villas — family-run villa with mountain views and a pool; high cleanliness/comfort scores and good staff reviews. (booking.com)
• Vishwa Retreat — small boutique hotel with a rooftop/lounge and spa facilities; good option if you want modern rooms without a luxury price. (vishwaretreat.com)
• Blue Haven Guest House — budget guesthouse with a pool and convenient location (~0.6 mi from Temple of the Tooth); generally good value but mixed individual reviews (read recent feedback). (booking.com)
• Kandy City Inn — basic, centrally located budget hotel (walkable to the city centre/Temple); good for travellers who prioritise location and price. (booking.com)
• Kandy Railway Inn — very budget-friendly, excellent for short stays or if you’re arriving/departing by train (simple, clean, central). (booking.com)

Quick booking notes

• Typical mid-range hotel prices in Kandy are often around US$30–$80/night; budget guesthouses/hostels can be much lower (from under US$20 in low season). Prices and availability change by season and dates, so check current rates for your travel dates. (budgetyourtrip.com)
• Staying near Kandy Lake / the Temple of the Tooth gives easy walking access to main sights; many budget hotels and guesthouses are a short tuk‑tuk ride away. (expedia.com)

If you’d like, I can pull live prices/availability for specific dates and the number of guests — tell me the dates and party size and I’ll check.