Grab the split mortgage with both hands if it's offered. I doubt that they will though from your brief description.
If you have a mortgage of €122k , on Svr or 5% , you are paying €6,000 a year interest.
If they split €40,000 into a warehouse, you are saving €2,000 interest per year if it's an AIB or ptsb split. In other words your repayments are being used to pay down capital instead of paying interest. (the principle is the same with BoI, but the saving is not as great)
In fact, I strongly suggest you write to whomever mentioned the split, and tell them that, on reflection, you think it might be the best solution and you look forward to hearing more details of the offer.
Brendan