If you’re planning to remortgage your leasehold flat, one of the most important things to consider is the length of your lease. A lease that’s too short can significantly affect your ability to secure competitive mortgage deals—or even get approved at all. In this comprehensive guide, we’ll explore how your lease length impacts your remortgage, when and why you should extend it beforehand, and how to coordinate both processes to get the best outcome.
Why Lease Length Matters for Remortgages
Your leasehold property’s value and appeal to lenders are directly tied to the length of the lease. Most high street mortgage lenders have strict requirements around minimum lease terms.
Typical Lender Lease Requirements:
- 85–90 years or more: Ideal; minimal concern.
- 70–80 years: Mortgageable, but lenders may offer reduced terms or higher rates.
- Under 70 years: Very limited lending options.
- Under 60 years: Often considered unmortgageable.
Lenders want to ensure that their security (your property) holds its value throughout the life of the mortgage. A short lease introduces risk, both in terms of declining property value and reduced saleability.
Should I Extend My Lease Before Remortgaging?
In most cases, yes—extending your lease before applying for a remortgage will:
- Increase your property’s value
- Make you eligible for more lenders and better rates
- Avoid rejection or delays in the application process
Some lenders will conditionally approve your mortgage if you agree to extend the lease concurrently. However, this can complicate timelines and create legal uncertainties.
The Benefits of Extending Before Remortgage
1. Better Mortgage Deals
With a longer lease, you’ll qualify for:
- Lower interest rates
- Better fixed-rate deals
- Longer repayment terms
2. Increased Property Value
A lease extension—especially if your lease is below 80 years—can add thousands to your flat’s value by removing the risk of marriage value and ground rent escalation.
3. Streamlined Legal Process
If you complete the extension before the remortgage, your solicitor only has to register one set of changes (the mortgage) with the Land Registry. This simplifies paperwork and reduces duplication of legal effort.
What If I’ve Already Started the Remortgage?
If you’re already mid-process:
- Check with your lender: Some may allow you to pause or delay completion while you extend.
- Speak to your solicitor: They may be able to coordinate both processes together, although this often requires lender consent.
- Consider short-term financing: A bridging loan or product transfer may provide breathing room while you extend.
In some situations, extending during the remortgage process is possible—but it requires careful coordination, professional oversight, and lender approval.
Case Study: Combining Lease Extension and Remortgage
Emma owns a leasehold flat in London with 77 years remaining. She wants to remortgage to secure a lower interest rate. Her broker advises her that with the current lease, options will be limited and rates higher.
Emma commissions a valuation and initiates a statutory lease extension, adding 90 years and removing ground rent. She delays her remortgage by 8 weeks and then qualifies for a new 5-year fixed rate with a top-tier lender.
Outcome:
- Remortgage approved at lower interest rate
- Property value increased by £18,000
- Lease now secure for 167 years
Marriage Value: Why Acting Before 80 Years is Critical
If your lease has fewer than 80 years remaining, you must pay marriage value—a portion of the value your flat gains as a result of the lease extension. By extending before reaching 80 years, you can avoid this significant cost.
Marriage Value Example:
- Flat value before extension: £300,000
- Value after extension: £330,000
- Uplift = £30,000
- Marriage value payable: £15,000 (50% of the uplift)
Extending before this threshold can literally save you tens of thousands.
Coordinating Extension and Mortgage Timeline
If you’re planning to remortgage and extend your lease, here’s a suggested order of operations:
- Valuation
- Get a lease extension valuation from a RICS-registered surveyor.
- Legal Advice
- Consult a solicitor who specialises in lease extensions.
- Serve Notice (Statutory Route)
- Your solicitor will serve a Section 42 notice to your freeholder.
- Negotiate and Agree Terms
- Typically takes a few months.
- Complete Extension
- Your solicitor registers the new lease.
- Apply for Remortgage
- With the extended lease in place, you’ll have access to the best possible deals.
If time is critical, speak to your solicitor about doing both in parallel—with full transparency to your lender.
FAQs About Remortgage and Lease Extensions
Do I need lender permission to extend my lease?
- Statutory extension: No permission required upfront.
- Informal extension: Yes, you’ll usually need lender consent.
Can I remortgage during the lease extension process?
Yes, but it depends on the lender and whether the lease extension will be completed prior to registration of the new mortgage. Be cautious and always seek legal guidance.
What if the freeholder is unresponsive?
Under the statutory route, you have legal recourse. If the freeholder does not reply, the First-tier Tribunal can determine the premium and terms.
Can I fund the lease extension through remortgaging?
Yes—many clients use equity release from their remortgage to pay for the premium. Some lenders offer products that accommodate this.
Expert Tips & Best Practices
- Start early: Don’t wait until your current mortgage deal ends to address the lease.
- Use specialists: Work with RICS surveyors and leasehold solicitors.
- Avoid informal deals: Informal extensions may include rising ground rent and limit lender compatibility.
- Get pre-approval: Some lenders will issue conditional offers based on your intent to extend.
Common Mistakes to Avoid
- Overlooking the lease term: Many buyers and even brokers miss this crucial detail.
- Delaying until mortgage rejection: Don’t wait to act until you’re turned down—fix the lease first.
- Going informal without understanding the risks: Always get advice before accepting an informal offer.
Maximizing Value During Remortgage
By extending your lease, you’re not just ensuring mortgage eligibility—you’re improving your home’s market value, saleability, and long-term financial performance. It’s an investment that yields immediate and future rewards.
Ready to Combine Remortgaging and Lease Extension the Right Way?
At Extension.Lease, we work closely with mortgage brokers and solicitors to time lease extensions perfectly with your refinancing goals. From valuations and notices to negotiation and legal support, our team ensures a seamless and profitable experience.
