Gave up on Family Home and Moved whats going to happen with Mortages.

Personal and income details
Income self: 480 per week after tax
Income history: unemployed last 5 years got 6mths work
Income partner/spouse: BTEA 188 per week
Income history: house mum
number of children: 3
Amount of Mortgage Interest Supplement received: No longer receiving this as we moved from our PPR (House 1) and rented it out as there was no work or education opportunites and we were too far from our family
Home loan
Lender: KBC (House 1)
Amount outstanding:240,OOO
Value of home: €120,000
Interest rate: fixed rate: SVR 4.254% I think aprox
Monthly repayment: 890 interest only but paying 400 (rent less house insur and life insurance)
Rent received -500

Amount in arrears:not sure as statement doesnt really say or maybe im not reading it right. only moved out a year ago, was getting mortgage interest supplement and now paying rent received less life assurance and house insurance so paying 400 per month

House 2 - Let out
Mortage - 280 tracker 30yrs left interst only
Monthly repayment - 520
Rent received - 1000
Life assurance - 105
Maintenace - 100p/m (house needs lots of improvements)

Savings - None
Loans - None
CC- 5000k


We were both unemployed for the last 5 yrs and we decided to move closer to family to get work as we couldnt go on as we were any longer. Since letting out our PPR house number 1 we have been informed we are allowed to sell it and to repay shortfall. Before we moved we asked if we could do this and the bank said no
I dont know how this is going to work out, currently we are just about managing but we are a lot happier having made the move. My spouse is in college for the next 4 yrs she is just in year 1. We have the children in childcare and paying rent 550 per month. We are not getting any rent allowance. My job is just for 6 months and then we will revert back to jobseekers benefit unless I get work after 6 mths up.

We have no other loans but do have a credit card balance of 5000 approx.

My question is how do I deal with the mortgage shortfall and what is the best option available to us.

My wife is in college for another 3 yrs + so we cant move to go the bankrupcy route. I am in the building trade and cant see any major changes workwise.
We are both in our 40s.
Both houses now mean nothing to us. We just want to see an end to it all. we have put our lives on hold for so long and that is why we moved to restart which so far appart from been finacially worse off we are much happier,, but every day we have the worry of how we are goint to pay the shortfall of house number 1. We have no savings.

Any advise welcome.

Looks like a case for the new insolvency system once it's actually up and running.

Have you asked the lender for property 2 if you can sell it?

Also is it interest only for the duration of the mortgage? Are you PRTB registered etc? What is it's value. Are you using the excess rent to live on?

Interesting that KBC allowed you to sell once you'd moved out. A tactic others might want to try. There is no way you're going to be able to service the shortfall on social welfare rates, they are just not being realistic yet.

Thank you for your reply Bronte.
House number 2 is valued at approx 200k at the moment, it is a 35yr interest only tracker with approx 30yrs left on it.
Both houses are regristered with the PRTB. Due to having the properties we cannot apply for Family Income supplement to support my husbands wage and when we were out of work we couldnt get rent supplement because of having the properties so the extra cash we get from property number 2 is just used to help us get by and there isnt much left when we take out tax, maintenance etc.