There seems to be something a bit odd in your numbers
Annual gross income from employment or profession: €42,500 (civil service )
Annual gross income spouse: €43,000 (private sector)
Monthly take home pay: €2480 (including child benefit)
If you are earning €85k between you, your take home pay should be a lot higher.
If you are earning €85k between you and if you have a very small mortgage €81k at Local Authority mortgage rates, your repayments should be very small. OK, I see that your repayments are €700 a month.
If your repayments are small, how come you have racked up €30k of expensive non-mortgage debt?
How is the clawback calculated?
Profit = €270k - €160k = €110k
Clawback was 20% or €20k
Reduced now to €10k . Is that right?
So your equity is €180k (€270k - €80k - €10k)
YOu neeed to borrow €160k (€340k -€180k)
€160k @3.5% over 25 years would be €800 per month.
If you are borrowing when your repayments are €700 per month, you will be under a bit more pressure at €800 per month.
Brendan