Negative Equity Mortgage - Sell up and bring the NE with us, or keep second property?

Spot

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Hi, would love some advice on our situation

Married, 2 children.
Salary 1 = 70k
Salary 2 = 25k
Savings = 20k
Both permanent private sector


Outstanding Mortgage = 235k on a house worth (probably) 135k. Tracker with EBS (Never missed a payment).
No outstanding loans or credit card bills, very clean credit record.
Childcare costs = 500 euro per month

We have planning permission to build our own house on a site that we own. We are now at a point where we need to decide if we should sell up our current property at a huge loss (approx 100k) and apply to carry that negative equity with us to our self build, or to rent out our current property and apply for a new second mortgage for our self build (cost of build = 200k, so would look for a mortgage for approx 170k and would build savings to 30k). Our current house is in a very good rental area (although have calculated that will likely cost us at most 5k per year to keep taking into account any shortfall we have to pay, any interest on the rent and any upkeep of the property) so this option if financially sound, could work out for us.

Would love to hear some advice on whether we should sell and move the NE, or rent out our current house and apply for a second mortgage.

Thanks in advance!
 
Have you approached any bank or a mortgage broker to see if keeping the house is viable? You'd have mortgages of €405,000 on a joint income of €95,000.
Even before you do that you need to do up a budget spreadsheet on income & expenditure if you were to keep both properties. Have you factored in a tax bill on the rental income & the downsides of being a landlord?
Is the house in an area where prices are rising or falling - how long will it take to climb out of that negative equity?

It's really difficult to advise without more numbers on mortgages, income, outgoings etc etc
 
I think you may struggle to get a mortgage either way.

You say it would cost you €5k a year to keep the existing property. The interest on the negative equity at €100k would not be very different.

If you are comfortable with the idea of being a landlord then I think this is a simple question of where you think the price of the property is going over the next few years.

Simple question. Unfortunately I don't have the answer.
 
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