Accelerate Savings or Loan Repayments when applying for mortgage?

All other things being equal, when applying for a mover mortgage (selling current home 90k equity) should we:

A) Pay off personal loan used for renovations ~7k at an accelerated pace (regular payment is €200 p/m) to €1200pm

B) Have regular savings of €1000 p/m and maintain loan repayments at €200 pm?

Which do banks prefer to see?

(no other debts requiring maintenance)

Generally, personal loans count against you when applying for a mortgage. People tend to get into a habit of taking loans. But it'd be viewed differently when it was for a specific purpose like a house extension. But even from a psychological perspective, do you want to be left repaying a loan for an extension on a house you no longer own?
I'd focus on paying down the debt quickly, assuming you've enough equity / savings to cover the 20% deposit, and all fees.