Does rising interest rates affect renters? Why it impacts rent prices

Note: This article is based on information as of September 29, 2026.

“I don’t have a mortgage, so news about interest rates doesn’t really concern me.”

If you live in a rental, you might think that way.

However, if the landlord has debt, changes in interest rates can affect their burden. That said, it does not necessarily mean that rent will rise just because interest rates have gone up.

For those who continue to rent, it is important to look not only at the rent you are paying now but also at future housing costs.

Does rising interest rates affect renters?

On September 18, the Bank of Japan decided to set the target for the short-term interest rate at around 1.25%, which was implemented starting September 24.

Among landlords who own rental properties through borrowing, those using variable interest rates or loans subject to interest rate reviews may face increased repayment burdens. On the other hand, there are landlords who have no debt or those whose repayment amounts do not change immediately, such as those with fixed-rate loans.

It is not the case that the repayment amounts for all landlords will increase at once.

In reality, how are advertised rents moving?

In a survey for August 2026 released by At Home on September 28, the average advertised rent for rental apartments in five areas of the Tokyo metropolitan area (the 23 wards of Tokyo, the Tokyo suburbs, Kanagawa Prefecture, Saitama Prefecture, and Chiba Prefecture) exceeded the figures from the same month of the previous year across all floor area categories.

The “advertised rent” referred to here is the amount including rent, management fees, and common service fees for properties listed on the company’s website. It does not mean that the contract rent for people currently living there has increased by the same amount.

Also, one cannot conclude from this survey alone that “rising interest rates have pushed up rents.”

Interest rates are not the only reason rent prices move

In addition to loan interest rates, landlords have costs such as repairs, equipment replacement, management, and tax burdens. The Ministry of Internal Affairs and Communications’ Consumer Price Index for August 2026 also rose by 1.9% year-on-year overall. However, this figure cannot be considered the exact rate of increase for property maintenance costs.

Rising costs for landlords can be one factor that pushes up rent. Actual rent is also determined by the balance with surrounding market rates and rental demand.

Nearby advertised rents, the number of vacancies, location, building age, facilities, and the supply of competing properties are also relevant. “Wanting to raise the rent” and “finding a tenant at that rent” are two different things.

What those renewing their leases should look at

Rent does not automatically increase just because it is time for a renewal. First, check if there is a proposal for a rent revision.

If you receive a notice, compare the reason for the revision, your current contract terms, and the advertised rent for similar properties. It is easier to understand if you look at not just the monthly difference, but also the burden over one year or the next contract period.

For example, if your rent increases from 100,000 yen to 105,000 yen per month, the difference is 5,000 yen per month, 60,000 yen per year, and 120,000 yen over two years. This is an example for explanation purposes and not a typical rent increase amount.

However, this does not necessarily mean you should move out immediately. Moving also incurs costs such as security deposits, key money, agency fees, and moving expenses. Compare the total costs, not just the difference.

What those planning to move should look at

When looking for a new home, use the current advertised rent, not the rent you are paying now as a benchmark.

Try comparing properties in your current area and your desired moving area that are similar in size, distance to the station, and building age. Understanding the difference from your current contract rent makes it easier to consider your budget after moving.

What those not planning to move should look at

Even if your lease renewal or move is still far off, it is helpful to check the difference between your current rent and the advertised rent in the surrounding area.

Also, confirm your next renewal date and your household’s financial flexibility if your housing costs were to change. This is not a prediction that rent will definitely rise, but a check for preparation.

Summary

Even if interest rates rise, it does not mean that the rent for all rental properties will increase. Rent is not determined solely by interest rates.

However, you cannot definitively say that it is irrelevant because you do not have a mortgage, or that your current rent will continue forever.

Check the advertised rent in the surrounding area, the timing of your next renewal, and the rent if you were to move. Use news about interest rates as an opportunity to think about your future housing costs, rather than whether or not to buy a home. That level of usage is sufficient.

Reference Information

Bank of Japan, “Change in the Guideline for Market Operations” (Published September 18, 2026)

At Home, “August 2026 Trends in Advertised Rent for ‘Rental Condominiums and Apartments’ in Major Cities Nationwide” (Published September 28, 2026)

Statistics Bureau of Japan, “Consumer Price Index, Nationwide, August 2026” (Published September 18, 2026)

e-Gov Law Search, “Act on Land and Building Leases, Article 32“

Ministry of Land, Infrastructure, Transport and Tourism, “Tax System Related to Land Ownership“