Pay down variable HELOC or fixed Mortgage?

Your reader see a couple of the main issues already:

1. Paying high-interest debt first vs. low-interest debt is desirable, all other things being equal
2. Accelerated mortgage debt payments reduce savings (once they go toward the mortgage, they can't be taken out)
3. The interest rate on the HELOC is variable

The reader's primary concern beyond this appears to be having enough funds available for big expenses. Let's take the mortgage out of the equation, since it's fixed, and likely will still be around when the big expenses hit. That leaves how to handle the HELOC. For this, there are a couple of ways to handle this:

1. Pay down the HELOC at a faster rate down to a level that will allow borrowing for the expense, and then pay the minimum on the HELOC, putting the difference in savings.
2. Pay only the minimum on the HELOC and save the difference in a savings account to build up cash reserves for the expense. (Basically don't accelerate the payments at all)
3. Pay off the HELOC ASAP so the debt goes away, and then save for the expense. (Accelerate the payments to get rid of it.)

These all will move toward the goal of having the big-expense funds available when they're needed. Some variables that could derail any of these, though:

1. The HELOC rate could rise. 2.24% is very low. Is it a teaser rate? In any case, it doesn't have much room to go down.
2. The HELOC limit could be reduced by the bank. Depending on any number of things, and whether the terms of the HELOC allow it, the bank may be able to reduce the limit on the HELOC, so any borrowing cushion could evaporate.
3. Unexpected expenses like job loss, illness, etc. But these can derail anything.

If I were in your reader's shoes, I'd place priority on building up cash reserves to a comfortable level, then paying down the HELOC, then the mortgage. Cash in the bank buys time. The HELOC isn't as secure as money in the bank. For sure, this is a more costly way of doing it in the long run, since there's more interest paid on the HELOC, a low HELOC balance will do no good in the event of job loss, and the bank could well reduce the limit before then (or perhaps because of the job loss). I'd also encourage your reader to check out the terms of the HELOC to see whether my concerns are actually issues or not.

MBH, as usual lays things out-very accurately.

I would just add a few minor points.

The HELOC is a risk to your home. When things go bad, sometimes they go very bad, and it can happen in a hurry.

Statistically, long-term disability is a real risk among us all-usually related to an accident. Do you want the roof over your head-to be at risk?

So, I would be sure I have an emergency fund, but would then pay the HELOC off as fast as possible.

Rates are going to climb this year-take full advantage of the low rates and get rid of the HELOC!

I totally agree with the Doctor on this one. After you factor in the possible risk of losing your home, the 1-2% difference "saved" in interest is nothing. For every $10,000 you do not pay down on the HELOC you are saving $200 a year, WHOPEE! I am not putting my most valuable asset at risk for that. I would pay off the HELOC ASAP and start building my emergency fund.