Lease Extensions should only be considered if the cost of the extension is lower than the value added to the property. That said, you may still need to find a considerable sum to cover the premium and associated fees and may be considering a loan or mortgage extension.
Fridaysmove are not a regulated Financial adviser and do not make recommendations about the suitability of loans.
Mortgage providers may favourably consider extending a mortgage or making an additional loan for a Lease Extension, as it adds to the value of the property and thus improves their security.
Mortgage providers also have increasingly strict rules about the length of lease they are prepared to loan against and they may actively prefer you to extend a lease. Call 0330 660 0287 to discuss individual Lender loan conditions.
According to www.moneysupermarket.com loans at the moment are available at rates that mean repayments of around £53 per month per £10, 000 borrowed (assumes a 25 year mortgage, 4% interest rate - calculated using the Guardian mortgage repayment calculator). So a loan of £20, 000 would effectively cost around £106 per month. It would be wise to add £1500 or so to the cost of the premium to cover possible loan arrangement and legal fees - Note that the fees required by Lenders vary and this is just a very approximate 'guesstimate'.
Note that we are not mortgage advisors or brokers and very strongly recommend that you take advice before taking out any loan.