This is a very interesting question. And this is how I would approach it.
You do not need to forecast interest rates for the next generation or make a plan for what you will do in 30 years because you are not stuck with the decision you make today for the next 30 years. Work out what is right under the current circumstances and review the decision if the underlying factors change.
First look at the investment.
You can adjust these figures for the expenses or anything else which reduce your net profit.
If you sell the property you will have €60,000 to pay off your PPR
This will save you €60,000 @3.3% or €2,000 a year.
So assuming property prices remain the same, the decision is not even close. You are better off by €5,000 a year at the moment.
Other factors to consider
The outlook for house prices and your exposure to property
You already have a property worth €1m so maybe owning another property worth €280k is excessively risky.
That would depend on your income, age, etc. I am not sure that reducing your assets from €1,280k to €1,000 will make that much of a difference.
Your heavy debt and exposure to interest rates
Again, you are obviously comfortable with the €750k mortgage on your home at present. Presumably you have a high reliable income which can service these repayments easily? Knocking €60k off the mortgage won't make that much difference.
I would expect that you would be able to refinance your home loan at below 3% within the next 6 months. However, in the medium term, I would expect rates to rise. I could be wrong on both counts.
I am not concerned at you having a mortgage of €220k @0.55%. It's well covered by the rent and you have reliable tenants.
Review the decision after a year and every year using the above system
Over time, as you pay down the capital on the tracker and if the property rises in value and if interest rates rise, the numbers will change so that selling and paying down the PPR will make sense.
Brendan