Follow-up financing with ongoing KfW loan

Dear Sir or Madam,

I am new to the forum and have a question about our follow-up financing, which does not give me peace of mind and for which I have no solution with my layman's knowledge.

We took out a loan to purchase our apartment in 2006. Term 15 years. In 2011 we sold the apartment, transferred the loan to a newly acquired single-family house, and increased it with a KFW loan (term 10 years, i.e. until the regular end of the first loan).

Meanwhile, interest rates have dropped significantly (almost 2%). I expect this to remain so for the near future. After 10 years (i.e. 2016) we have a right of termination for the first loan. The KfW loan of course does not allow a right of termination after 5 years.

How can I nevertheless terminate the first loan in 2016 and replace it with another, cheaper one? (Outstanding debt approx. 120,000 EUR, KfW loan approx. 70,000 EUR, value of the single-family house approx. 280-300 TEUR).

Is the KfW loan to be terminated (Programm 124)?
Are there banks that accept a registration in second place in the land register?
Does the financing bank itself submit a new offer after 10 years upon termination?

Thank you very much - I look forward to your answers! If I have forgotten anything I will of course add it...

moti

You can simply cancel the loan at your bank, I would inquire at the latest 6 months before the expiration and also ask for a follow-up offer.
Will the KFW have first ranking? Most banks take KFW as second ranking in the land register, should be no problem!
Whether the interest rates will remain this good for that long is questionable, with your loan-to-value ratio you could also consider a forward loan 2 years before expiration if the interest rates remain this good.
Regards!
Michael

Thank you for the quick response. I did not write precisely enough:

The bank loan and the real estate loan are combined into a total sum and then registered in first rank. If the bank loan is terminated, the sum would have to reduce to the KfW loan, but the first rank would remain for the KfW loan, right?

Best regards

moti

That's it

Basically, both are real estate loans.
The KFW always wants the first rank in the land register, it should already be stated in the land register that the KFW loan has the first rank and then the bank comes, this is completely normal and does not pose a problem.
Because the KFW only accepts first-ranking security from the property.
It actually cannot be in one sum, there will be 2 loans, since one is KFW and then the bank loan.
Regards!
Michael