Clean flat right at the heart of Alfama. There are a few nice cafes close by too, where you can have lunch or dinner. Breakfast is a bit more challenging as most places open around 10 or even 11.
The only slight negative is that because these cafes are very close it can get a bit noise in the evening, in particular on Friday and Saturday, so if you have small kids it might be a bit noisy but otherwise great place to stay and explore the old part of Lisbon.