The annual interest you are paying on your mortgage is around €6,000.
Your annual repayments are €16,000.
So you are currently reducing the mortgage by about €10,000 a year.
Have you approached Bank of Scotland?
You should be able to , temporarily,, switch to interest-only under the MARP.
When your wife returns to work, you could resume repayments.
But the key thing here is that your home is costing you €6,000 a year. You would not be able to rent anything similar for less than around €15,000 a year. So you have to take every possible step to keep it.
BoSI are anxious to leave the Irish market as quickly as possible and so may encourage you to sell your home and may offer you a deal if you do so. For example, they may offer to write off the shortfall if you sell the house for €280,000. That would be a nominal gain of €50,000 for you but then you would have to find new accommodation which would be a lot less attractive than your present home.
What are your wife's employment prospects?
If you are making only €25,000 as a self-employed person, would you be better off looking for salaried employment?
Finally, what is the Canada Life policy of €10k? Are you still contributing to it? If so, you should probably stop assuming there are no charges for doing so? Can you cash it? Right now your priority is to keep your home and if you have to use your €15k savings to keep your home for a further year, you should do so. Your wife may get employment in the meantime.