Can I remortgage during a lease extension?

A lease extension can be a long process - usually 9 to 12 months to complete*.

*When we talk about "complete" in this article, this is the point at which your solicitor has paid your freeholder's solicitor, and confirmed completion of the transaction. With a house purchase, this would be the days you get the keys.It is important to note that Land Registry application happens after this.

Often people fix their mortgages rate for either two or five years. It is quite possible that your fixed rate deal will come up mid-way through the lease extension process. If this happens, most people choose to find a new deal rather than stick on the Standard Variable Rate, which is often much more expensive.

Can I remortgage while doing a statutory lease extension?

The answer to this is probably "yes".

So long as your mortgage company is happy to lend as things stand with your existing lease (i.e. lease length, ground rent) then there is no reason why you can't remortgage any point up until you pay for your new lease and the process completes.

This is particularly true if you're taking a new deal with the same lender - as they usually don't alter the mortgage details on your title anyway.

There are two exceptions to this:

1) If your lease is short or your ground rent is high, it may be that a new lender won't offer you a deal until you've completed your lease extension. If this is the case, it's easiest to complete a lease extension first and remortgage after.

2) If you want to remortgage after your lease extension has been completed but before registration is complete at the Land Registry, then read this article until the very end.

The reason you can do a remortgage during a lease extension is that there is no requirement under the legislation to notify your lender you're doing a statutory lease extension, and their consent is not strictly needed. (It might be that there is something in your mortgage documents that says you need to tell them, but we'll leave you to read that.)

Whatever mortgage you have on your deeds at the point at which the process for registering your new lease is started at the Land Registry, this will be automatically moved over on to your new, extended lease and title document.

This is because there is a special part of the law for a statutory lease extension (section 58, if you're interested) which does this. If you're doing an informal lease extension, you must speak with your solicitor as they'll need to get consent from your lender - and changing your lender during the process could confuse them.

Can I remortgage once the lease extension is complete but before registration is complete at the Land Registry?

This is where things do get a bit more tricky.

Once your lease extension is complete, any lender will be able to see that you've got a pending lease extension at the Land Registry - and probably won't complete on the remortgage until this application has been completed.

The Land Registry are currently taking about a year (but can be longer) once a lease extension is complete, to update their system.

The good news is that if your remortgage is being held up by a lingering application, you can ask your solicitor to expedite the Land Registry process and they'll do this much more quickly. This has the positive double-whammy that you get your mortgage sorted and the Land Registry process for your lease extension wrapped up more quickly.

In conclusion

If you want to remortgage during the statutory lease extension process that is fine, but you should always tell your solicitor.

If it looks like your remortgage is not going to be done well ahead of the completion of the lease extension process (again: this is the bit where you pay and sign the documents), then you need to make sure that either the lease extension will be completed before the remortgage or the remortgage before the lease extension.