Sell vs. wait (again!)

Sorry, yet another sell vs. wait query.
We own a house in Galway, with details as follows:

• 3-bed, not a great location on east side, bought 2006, rented out and getting net €615/month
• €300k, PTSB 100% 35 year tracker mortgage, no deposit so none of our own money in it
• Tracker currently at 2.3% incld. ECB
• Monthly mortgage is €1080
• Balance today is €254k
• Approximate market value today: €130-140k
• We pay €1600/m on rental of another place
• Out total accommodation costs are therefore 1600+465 = 2065/m
• We are both 40 in the next 4 months and have 4 kids, 7 months up to 7 years
• I have an engineering job but only just started as we were abroad for 3 years
• My wife is a national school teacher

SO, the Ballybane house costs us €465/m or €5580 p.a., a significant wad of cash for a house that is not likely to rise a anything more than a slight rate over the next few years. As a very simplified (and possibly completely incorrect), at the rate of increase in the house value versus our paying off the mortgage, the 2 could meet somewhere in the next 8-10 years, but that means getting to zero by pumping in upto to €50k.
The negative equity mortgage calculator on the PTSB website site suggests that (obvioulsy do not know if we could get approval yet) we could borrow 340k over 25 years if we put in approx 100k (which we have saved) - the repayment would be about €1900/month.

So are our choices as follows:
1. Status quo - pump in 2065/m for, say, 8 years = total 198240, rent during that perido then sell to clear the mortgage, go get another house, put in 100-120k, resulting in a possible 1800/m for 17 years that we would be eligible for at that stage AND have to wait in rental while our kids grow up (first world problem, I know). That scenario will cost 198240+367200 = 565k

The only way option 1 cost would reduce is if we make a 'profit' above what we owe the bank in 8 years.

2. Sell now + move tracker = 1900/m for 25 years = 570k

Am I completely mad? I'm definitely confused. Any comment or advice is greatly appreciated.

Why are you paying €1600 for a rental when you already have a three bedroomed house in Galway city?

moneybox said:

Why are you paying €1600 for a rental when you already have a three bedroomed house in Galway city?

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Because we have 4 kids and need the extra room and because after witnessing 2 cars being burnt out 25m from my front door and a knacker throwing a blood-stained kitchen knife into a rain gully on the street, we decided that this was not the place for us to bring up kids. Couple this with settled travellers moving into house behind ours and rife anti-social behaviour. REnts have gone through the roof in Galway and availability of anything you would deem half acceptable is very bad. Do you have a comment to make on my specific queries rather than asking why we don't move back to the house we own?

JohnB1 said:

Do you have a comment to make on my specific queries rather than asking why we don't move back to the house we own?

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Probably a little too sharp given that this would be a legitimate query on why you needed to rent!
However having answered that, the main issue that you need to establish is whether you will be permitted by your bank to transfer the tracker rate to a new mortgage. If so then you are likely to be better off selling the property now rather than gambling on the hope value of an increase in the price of the unit you currently own. Even if the price does arise this will be nullified by a likely higher rise in the area which you are considering to purchase. To me option 2 appears to be the most sensible decision.