I believe that the debt on existing mortgaged properties will not be deducted from how much you can borrow (3.5 x salary) to purchase a PPR. It will be treated under affordability criteria similar to how a car loan or childcare fees are considered and this may impact the amoount the bank will lend.
When it comes to rental income, I believe they stress the value by 20-25% i.e. 1,000 rent is treated as 800 and they use that figure to assess affordability against debt payments.