Q. I had a line of credit with an adjustable interest rate. When the rate rose above 8%, I took out an equity loan with a fixed rate of 6.5% through another bank. The first line of credit is still open to me, but the rate has fallen to 2.4%. Would it be smart to pay off the loan with the 6.5% rate now with my line of credit that is open?

A. Yes, switching your debt back to the cheaper line of credit probably makes sense.

How much you might save depends on how long it will take you to pay off your line of credit.

Your home equity loan is undoubtedly tied to the prime rate your bank charges its best commercial customers. And the prime rate is directly tied to the rate the Federal Reserve charges commercial banks for overnight loans.

It's highly unlikely that the Fed will push its overnight rate up this year. Most economists think next spring or summer is the earliest that could happen, and one economist predicted the Fed won't raise rates until 2011.

When the Fed does begin raising short-term interest rates, the increases will come one-quarter point, or maybe one-half point, at a time.

That means it would take some time -- and we're probably talking years here -- for the rate on your line of credit to reach what you're paying right now on your traditional second mortgage.

During that time, you'd be paying significantly less interest and have an easier time paying down your debt.

If you take advantage of the lower interest payments to reduce the balance more quickly than with the home equity loan, the more you'll save.