How extension remortgaging works
Two routes for extension remortgaging. Route 1: borrow before the build at current property value. The lender assesses based on your current property valuation, your income and affordability, and the increased loan amount. You receive the funds before construction starts. Route 2: borrow after the build at uplifted property value. You self-fund the construction (savings, bridging finance, builder staged payments), then remortgage at the higher post-construction valuation to release equity. Route 2 yields higher borrowing capacity because the property value is higher post-extension. Both routes are common; Route 1 is simpler but caps borrowing at current LTV; Route 2 unlocks the value uplift.
How much can you borrow?
Three factors determine borrowing capacity. First, loan-to-value (LTV) cap — most mainstream lenders allow up to 75–85% LTV on owner-occupier mortgages. Second, income multiple — typically 4–4.5x household income for combined borrowing. Third, affordability stress test — lenders check you can afford repayments at a 3% higher rate. Example: £750,000 property value, £350,000 existing mortgage, £120,000 household income. Theoretical max borrowing: 4.5x £120k = £540k, capped by 85% LTV = £637k. Net additional borrowing: £540k - £350k = £190k. The lower of these caps applies. For most London remortgaging, income multiple is the binding constraint, not LTV.
Current rates and product types
London remortgage rates in early 2026 are around 4.5–5.5% for 5-year fixes at 75% LTV, 4.7–5.8% at 85% LTV. Tracker rates (Bank of England base rate + margin) start around 5.2%. Standard variable rates (SVR) sit at 7.5–8.5% and should be avoided unless intentional. Product types: 2-year fix gives flexibility but exit fees if you refinance early; 5-year fix offers rate certainty for the build and 2–3 years after; 10-year fix provides longest certainty but penalty fees if you sell or move within 5 years. Choose based on your hold period and rate expectations. Builderr provides an introduction to a panel of whole-of-market brokers.
Process and timeline
Extension remortgage typical timeline. Week 1: agreement in principle with broker, document gathering (payslips, bank statements, ID). Weeks 2–4: full mortgage application, property valuation (£300–£600), lender underwriting. Week 5: mortgage offer issued. Weeks 6–8: legal work, identification verification, source of funds confirmation, redemption of existing mortgage. Week 9–10: completion and funds released. Total typically 6–10 weeks from start to funds in account. Apply early — if you need funds for site start in 12 weeks, begin the remortgage process at least 14 weeks ahead. Delays are common in stamp-duty-busy periods and require buffer time.
What lenders need to see
Six documentation requirements. First, proof of income — 3 months payslips (or 2–3 years self-assessment for self-employed), P60, employer letter. Second, bank statements — 3 months for all current accounts and savings. Third, identification — passport and proof of address. Four, existing mortgage details and redemption statement. Five, source of funds for any large deposits (anti-money-laundering). Six, planning permission and building control documents if remortgaging post-completion to validate the works. Lenders increasingly request a builder's contract or quote to verify how the released funds will be used — be ready to provide a fixed-price contract or formal quote from a regulated builder.
