Landlord using interest rate hikes & personal mortgage costs to justify rent increase—has anyone successfully shut this down at NCAT?
Hey everyone, looking for some perspectives or experiences from anyone who has pushed back on a rent hike where the landlord explicitly admitted they are trying to cover their own holding costs.
We rent a 2-bedroom granny flat/secondary dwelling (no driveway or off-street parking) in Glenmore Park (Penrith NSW area). We currently pay $540/week, which is already right at the very top of the market for a secondary dwelling around here.
Our PM/landlord originally wanted to hike it to $580, and after we sent through local comps, they replied with a "final offer" of $570/week. In their email, they explicitly stated:
"The proposed increase also reflects the significant increase in property ownership costs over recent years, including higher mortgage interest rates, increased insurance premiums, council rates, maintenance expenses, and broader inflationary pressures."
They basically admitted in writing that the hike isn't based on market value, but rather on their own balance sheet and interest rates.
The Market Reality vs. Their $570 Ask: We pulled active listings and recent rentals across Glenmore Park and surrounding 2750/2745 suburbs (South Penrith, Jamisontown, Cranebrook):
Glenmore Park 2-bed granny flats: Typically listing around $500–$520/wk (e.g., listings on Wattlecrest, Clearview, and Bujan St).
South Penrith 2-bed granny flats: Range from $470–$520/wk (e.g., Parker St, Christine St, Smith St).
What actually goes for $570/wk out here: Modern multi-level 2-bedroom townhouses with dedicated garages, or full 3-bedroom standalone houses ($570–$580/wk).
Under Section 44 of the Residential Tenancies Act 2010 (NSW), NCAT looks strictly at market comparability, amenities, and state of repair—a landlord's mortgage rates or private financial liabilities are not legal grounds for an excessive rent increase.
We’ve declined the $570 offer, informed them we won't sign a new fixed-term lease, and confirmed we’ll transition to a periodic (month-to-month) agreement when our fixed term ends on October 4 while we look for new accommodation by the end of the year. We asked to keep the rent at $540/wk until then to avoid taking it to tribunal.
My questions for the sub:
- Has anyone had a landlord or PM explicitly cite their mortgage/interest rates in writing, and did you use that as primary evidence if you went to NCAT or negotiated down?
-If you challenged an above-market hike on a secondary dwelling/granny flat, how did NCAT view the lack of dedicated parking/shared lot compared to standard units?
-Any tips on handling the PM while on a periodic lease while we shop around for a new place?
Would love to hear if anyone’s gone through a similar situation recently!