Contribute to 401k or pay down HELOC

[Malcolm Douglas]

Wanted to hear some peoples opinion on this question.

Due to maximum loan restrictions for a 30 year fixed mortgage on a 2-unit building in Chicago, a portion of my loan is being financed through a HELOC. The interest rate on my HELOC is adjustable and linked to Prime (currently 3.5%), no spread. This is currently less than my actual mortgage rate.

My employer 401k will match 50% of up to 6% of my annual contributions - im invested in basic SP index.

From your point of view - should i stop, or decrease, my 401k contributions and use those funds to pay off my HELOC sooner? Should I continue to contribute while rates remain low and switch thereafter? Other thoughts? Please provide your reasoning when answering.

Thanks

Mac

[Mindy Jensen]

@Malcolm Douglas, your employer is offering you free money, above and beyond your salary. I would put in at least as much as you need to get the full amount of their match, then pay off the HELOC. Repeat again next year if you don't pay it off this year.