Prepare the Baking Dish: Line an 8x8-inch square baking dish with parchment paper or lightly grease it for easy removal later.

Combine the Base Ingredients: In a microwave-safe bowl, mix the white chocolate chips and condensed milk. Microwave on high in 30-second intervals, stirring between each, until the mixture is smooth and melted.

Add Peppermint Flavor: Once fully melted, stir in the peppermint extract to evenly distribute the flavor.

Create the Festive Swirl: Pour the melted mixture into the prepared baking dish. Quickly add drops of red food coloring on top of the fudge and use a toothpick or knife to create festive swirls.

Set the Fudge: Allow the fudge to cool at room temperature for about 30 minutes before transferring it to the refrigerator. Let it chill for at least 2 hours or until firm.

Slice and Serve: Once set, remove the fudge from the pan, cut it into squares, and enjoy!