You will save €100k @ 3.1%
And you can pay the equity of 90k off your new mortgage so saving about 2.5%
So your annual savings will be about €5,500 if you sell the house.
It's also a good idea to reduce your exposure to property.
A possible reason for not doing so would be if the house is worth less than you paid for it. Any increase in value up to the price you paid for it would thus not become liable for Capital Gains Tax.
But if you don't want a shed in your back garden, then don't build one. That means keeping the house.
Brendan