Financing: Restructuring of KfW loan for the condominium

What do the experts say?

Interest rates have dropped enormously. So I thought about refinancing our KFW loan for a rented condominium that has been running for two years. 3.8% seems very high to me at the moment.
Why does the bank say that for such a request, not less than 2.99% is possible? Friends have just refinanced an old remaining loan at 2%.

I don't understand.

Regards Carl

Can you restructure the loan without a prepayment penalty? KfW loans are subordinate financing, so the bank usually requires a higher margin, which is reflected in the conditions. What is the loan-to-value ratio? I could ask many more questions, because without a reasonable presentation of the financing situation, there is no sensible answer. Maybe 2.99% is already a top interest rate in your financing situation!?

So the contract states that the early repayment of the loan...is permitted free of charge at any time within the first fixed interest period as a one-time full repayment or in partial amounts....

So I simply thought, I’ll pay back the KfW, I can do that in cash as well, and instead take out a cheaper one.

I’m a total layman with such things.

So the contract states that early repayment of the loan...is allowed free of charge at any time within the initial fixed interest period either as a one-time full repayment or in partial amounts....

So I simply thought, I'll repay the KfW, I can do that in cash, and instead take out a cheaper one.

I'm a complete layman with such matters.

What does your house bank say about the first loan? Are you getting an offer from them? As many have said, no one wants to be in the second rank in the land register. And if they do want that, you only get an unattractive interest rate.

When does your main financing expire? It makes most sense to switch completely. Many banks also allow switching at two dates.

Our primary bank with the first loan says 2.99% - nothing lower. That's actually still too much for me nowadays. The entire financing is planned for 20 years - so about 18 years left. But I plan to pay off almost everything after 10 years. For that, savings investments.

Why is there a second ranking in the land register? I just want to refinance something. I have no idea because we've never done that before. Otherwise, I have no debts, live in my own house without debt. Except maybe a mobile phone contract...

I now have an appointment with our other main bank (where our accounts are), and I'd like to go there well informed.

Well, let's do it with an example:
Lending value of the property (= value set by the bank for itself): €100,000
Financing 60% of the lending value (= mortgage loan, as super security): €60,000 at 2%
Financing from 60-80% of the lending value (= without good security, higher risk): €20,000 at 3%
If you only get your financing in one loan, you only see a weighted interest rate. But you already have the good loan with the bank and the risky one with KfW. Thus, the bank requires a higher interest rate (due to high risk).
A third bank will generally not finance the subordinated tranche, as there is a risk (in the foreclosure) of getting nothing.