In a medium saucepan, combine sweetened condensed milk, white chocolate chips, and semi-sweet chocolate chips. Heat over low heat, stirring constantly for about 5–7 minutes until melted.

Stir in peppermint extract. Separate half into another bowl and add red food coloring for swirls.

Line an 8-inch square baking pan with parchment paper. Pour the white chocolate mixture into the pan, then the red-tinted mixture. Swirl gently.

Place the pan in the refrigerator for at least 2–3 hours until set. Check firmness by pressing the surface.

Lift fudge from the pan by the parchment paper and cut into squares. Optionally, sprinkle with crushed peppermint candies.