Hmm, if affordability is paramount, I was surprised at how wonderfully affordable Belgium is. I based myself in Ghent, which is an artsy university town, and it was super cheap. Not tons of hiking, but there are a few pretty natural areas on the outskirts of town.
Not so affordable, but amazing for hiking, I’ve been living in the Swiss Alps for a while, myself. My favorite towns are Lauterbrunnen and Murren. Excellent home bases for hiking.
Also super affordable is Croatia and there are some gorgeous natural areas there. (I don’t have any specific hiking town recommendations there, but I had a nice time walking the paths on the islands off the coast of Split.
Freiburg, Germany is also pretty fantastic. It’s another university town - lively and with the most sunny days in Germany - and it’s right up against the famed Black Forest. I LOVED hiking there and would do it again in a heartbeat.
If you want to combine city + walking, Edinburgh, Scotland was pretty fantastic with its Water of Leith walkway - a hiking and biking path along the water that runs right through the city, but doesn’t seem like it’s in the city at all.
In Italy, I thought Assisi was a great hiking base and a lovely lovely town. And the Cinque Terre has tons of trails going up into the mountains around it.
I’ve also heard great things about the landscapes in Montenegro and it’s pretty darn cheap, especially if you stay off the cruise ship track or go off-season. I also hear internet is reliable (though other infrastructure is still developing).