Thanks Sarenco.
Yeah, based on comments from you both here today, I've already contacted them back again and arranged for a meet with a mortgage advisor to reassess the situation.
Unfortunately, as circumstances would have it, we have found a house we like, so if we wanted to move forward with that, we would have to go with 2nd mortgage option, as seller not interested in chain, wants a quick sale.
I'm trying to fully explore the difference in monthly cash outlays with both options to see which makes more sense.
1) If mover tracker, then €417k mortgage (i.e. 400k new mortgage with 17k negative equity) at tracker +1% rate for 5 years = 2.3%. For a 25yr mortgage = 1829/month. = 22k per year.
2) If have 2 mortgages, then have 247k@1.3% = 1237/month, and 400k@3.8% (25yr mortgage) = 2067/month, total = 3300/month mortgage repayments, then allowing for ~300/month gain from rental, outlay is 3000/month = 36000/yr.
So cash flow difference is huge at €14k. If house prices stay the same as currently, only benefit in Option 2 id that I reduce the 1st mortgage principal by ~10k/annum, so ~4k worse off per year if I go with Option 2.
Does that seem like a correct analysis to you? If so, does shine a different light for me obviously.
would have to avoid a chain sale of houses and associated time delays. however if we are outbid for the house we like, then no harm in exploring BOI tracker mover in more detail.