Would the lump sum method not be better in the following scenario:
You buy a house using NIB's LTV mortgage at 4.5% interest. Therefore, if the interest in the mortgage is below the threshold for TRS, i.e. if the interest is below €20,000 for a married first-time buyer couple, your mortgage rate is effectively 3.6%.
The lump sum on deposit with Northern Rock will earn 5% (4% gross) - a savings of 0.4%. (There are better rates than 5% available but Northern Rocks is the only one with no upper limit).
Therefore, for every €100,000 lump sum, you'd be saving €400 per year. Not really alot of savings but worth considering.