David Craig Ellis, 41, has admitted killing Alec Warburton, 59, at a house in Sketty, Swansea, but denies murder.
Mr Ellis said he was unemployed when he moved into Mr Warburton's house.
He told Swansea Crown Court when he could not afford his rent one month, Mr Warburton came into his bedroom and suggested they do "things of a sexual nature" instead.
The jury heard Mr Ellis moved into the house in May 2015 after seeing a listing on the website Gumtree.
Mr Ellis said he was claiming Jobseekers Allowance and despite the tenancy agreement stating nobody claiming benefits could rent the room, he moved in and said Mr Warburton was aware of his financial situation.
By June, he could not afford the full month's rent. He offered to help his landlord carry out renovation work on his father's house instead, but he declined.
Two or three days later, Mr Warburton knocked on Mr Ellis's bedroom door and said he was still in arrears, the court was told.
He said Mr Warburton suggested they should do "things of a sexual nature".
Mr Ellis told the court he was "quite shocked" and "repulsed" by the comment.
When asked why he repeatedly hit Mr Warburton on the head with a hammer, Mr Ellis replied: "I don't know, I was angry but I can't say any particular reason why whatsoever. I was angry about my break up and the fact he'd asked for sexual favours."
He said he tried to clean up the blood and "feebly" attempted chest compressions because he could not feel a pulse
Asked why he did not ask for help, he replied: "I panicked - I didn't think anyone would believe me about what happened."
The court heard on 1 August, Mr Ellis drove Mr Warburton's car with his landlord's body in the boot to north Wales.
He dumped the body in the disused Prince Llywelyn slate quarry in Dolwyddelan, Conwy county, which he was familiar with from his childhood.
Mr Ellis returned home before catching a ferry to Northern Ireland and travelling to the Republic of Ireland where he eventually was arrested.
He confessed to the Garda in Ireland where he had dumped Mr Warburton's body.
"I just thought it was the best thing to do for Alec's family," he said.
The trial continues.
A man accused of murdering his landlord was asked to give sexual favours in lieu of rent, a jury has heard.