What financing is available for home renovation?

Hello,

we have a rather complicated situation and hope to find help here.
We have a house that urgently needs to be renovated, at least a new heating system and windows are necessary, and later insulation.
However, we are having some difficulties with financing the renovation.
The key data of the house:

- Multi-family house built in 1969
- The house has 3 apartments, the 1st apartment 123 sqm used by ourselves, 2nd apartment 128 sqm rented out, 3rd apartment 80 sqm (attic, converted after purchase) also rented out
- Purchase of the house in 2003 for 210,000 euros
- For this, 2 loans were taken out, the first 125,000 euros and the second 50,000 euros (registered mortgage on the house in favor of the bank for 175,000 euros)
- The loan for 50,000 euros has already been repaid
- The loan for 125,000 euros is not being repaid but instead is paid into a life insurance until 2015, then the entire capital is to be paid out to the bank and possibly a residual debt of about 30,000 euros will remain
- Interest of 5.7% is paid on the entire sum until then,
so there is a burden of 600 euros interest and 670 euros life insurance, plus incidental house costs
- Fixed interest rate until mid-2013
- For the renovation we need a loan of 100,000 euros, 50% from the bank, 50% from KFW

So, now to the actual problem:

Another bank would like to redeem the house loan and additionally give us the 100,000 euros for the renovation at very favorable conditions, 3.19% for 15 years, but the bank that financed the house does not want to release us from the contract, not even if a prepayment penalty is paid.
They also offer us much worse conditions in comparison, around 4.5% for 15 years.
We are also not allowed to terminate the life insurance.
What options do we have now, because we do not want an additional loan as the monthly burden would then be too high.

I would be very happy if someone has a tip or could tell me what you would do in my place.
The renovation, as mentioned, must be done very urgently, so waiting until mid-2013 would be almost impossible.

Many thanks & best regards,
Simona

The 100,000 EUR already include insulation, right? Why do you have to act so quickly? If the heating is broken, just fix that first. Why do you absolutely have to replace the windows in 2012 and can't wait?

Hello, thank you for your reply! The windows are also very damaged and the oil consumption is enormous - about 7000 euros/year. The energy consultant said that we can save the most there, since we are heating a lot to the outside, I thought before we lose another 2 years we could already finance the new windows with that money.. Best regards, Simona