We LOVED this location. We had a lake view room with a balcony which we very much enjoyed. Highly recommend staying in Iseltwald versus Interlaken because of the charm of the small village and the setting. We didnt see much of Interlaken but it seemed commercialized and didnt have much character, but it was the main transportation hub. If you dont mind coordinating with the bus schedule to get to Iseltwald, it was such a nicer spot to be.
The hostel was very clean, the staff were wonderful and very helpful, the view was amazing and we appreciated having the outdoor space to use and common dining room/living room and access to the kitchen.
The only drawback is that the building is older and the walls were very thin, but the guests were very respectful and fairly quiet so we slept quite well. They provide earplugs too!
Would definitely recommend this place regardless!