Payoff Heloc or keep $ in savings?

[Rachael Shad]

What would you recommend? I have a 75K heloc on my primary residency, I recently used 25k of that to convert a detached garage on my property into a 1 bedroom apartment. The monthly payment due on the heloc is 1.5% of the outstanding amount (about $375 currently monthly). It’s a fluctuating interest rate that is based on whatever the prime rate is, currently 4%.

I have in savings enough to pay off the heloc and dont have a specific need for the cash flow from this rental or an additional rental that I own as my husband and I both have W-2 incomes. Our plan has been to just save all cash flow from rentals for future down payments on investment properties.

Would you pay off the heloc or just make the standard payment and keep all the cash for additional purchases? The savings is just in a standard savings account not making much interest.