Spanish is the common language here, but many people at the hostels and restaurants speak a little English because there are many visitors from other countries. Puerto Varas was founded by German immigrants in 1853, but most people who live here do not speak German anymore.
All of Chile uses the Chilean peso, including Puerto Varas. 1 peso is a very tiny amount because 1,000 pesos is about $1.50 in US dollars. They use a period instead of a comma to indicate "thousands" here, so 1,000 pesos would actually be written as 1.000 pesos or $1.000.
A bottle of water here costs 1.000 pesos or less. You can also drink the water from the tap safely here, so it is better to travel with a reusable water bottle. Some travelers told me that the water is so clean here that you can drink from the lakes and rivers, but I don't want to try that!
