Councillors consider the proposed rent increase for the 2021/2022 financial year at a special meeting of the council next week.
The recommended increase means an average weekly rent rise of £1.45 for a council home - bringing the average weekly rent to £86.59.
Service charges at council properties look set to largely remain unchanged.
The proposed rise keeps council rents well below rents in the private sector, with the average weekly rent of a two-bedroomed council property £92.28 compared to £153.49 in Rugby's private sector.
The report to full council also recommends expanding the rollout of new, energy-efficient boilers to a further 610 council homes and installing new bathrooms at 125 properties.
In addition, the report recommends increasing the council's housing stock through its acquisition programme, with plans to buy around a dozen properties during 2021/2022.
Cllr Emma Crane, Rugby Borough Council portfolio for communities and homes, said: "While we're always conscious of the impact of a rent increase on our tenants, the proposed 1.5 per cent increase allows us to carry on our programme of improvements to council homes while keeping our rents significantly below market rents in the private sector and those of housing associations.
"The proposals also mean we can invest in new properties, expanding both the number and choice of homes we can offer residents."
Councillors consider the proposals at the special meeting of the council on Tuesday (2 February).