Let's look at your home first.
You will be paying €160 a month for the next 24 years - that is the equivalent of a mortgage of €27,000 @5% repayment.
You also have to pay €190,000 in 24 years. That is the equivalent of around €60,000 @ 5% compound interest.
So the real value of your mortgage today is about €90,000.
They would have to agree to write off around €100,000 for you to be indifferent.
If they ever try to sell your mortgage to a vulture fund, they would be very lucky to get €100,000 for it.
That should be your initial offer. Make the offer and submit your calculations with it.
Investment property
Because you get tax relief on 75% of the interest paid, the figures will be something similar. They will have to offer you a discount of around 50% to make it worthwhile.
I don't want to take on anymore property debt and increase my exposure to one asset class.
Your true level of debt is around €200k backed by property worth €500k.
You have €200k of savings and an income well in excess of your expenditure.
I have often recommended to people that they should sell their property as they are overexposed to loans and property, but the particular facts of your case means that you should not be worried by this.
If you were to spend €300k on a home with €250k of borrowing, I would see no problem at all with that. I would probably agree that it was not a good idea to buy an investment property with that level of borrowings.
An outside the box suggestion
I doubt if BoSI will go for this, but why not put this proposal to them.
1) Pay €50k cash off the tracker mortgage
2) Transfer the remainder - €140k - to a new property
That would leave you with €230k to buy a new property closer to your wife's family.
Maybe introduce it gently to them. "If I give you €50k today, what will you write my mortgage down by?" They will probably offer you €55k, but you should hold out for around €75k. They might be more interested in seeing the RIP mortgage reduced as it's in Negative Equity.