This is normal conveyancing practice
Don't understand why vendor wants to bother with this...as the completion date is 3 months from SPA date Plus 1 month with interest chargeable.
If you fail to pay by end of month 4, then the 10% deposit will be forfeited.  When your lawyer advises release of loan is irrelevant as  long the completion date is adhered to.

BUT having said that, if you wants the purchase so much, suppose your lawyer can get around the issue. Just make sure the documentation in respect of your loan is completed eg bankruptcy search, loan documents and guarantor's doc (if any) are all ready together with the stamp duty been paid on the transfer form, then only ask for the title. What is left then is to register the transfer and charge documents at land office. Unless the land office is not able to give the registration number within 14 days,(technically, shld be able to give number immediately) your lawyer should
have no problem advising release of loan...the key word is "advise release"..within 14 days time frame