How much can I borrow with a home equity loan?

In most cases, you may be able to borrow up to 80% of your home's current value, minus the balance of your existing first mortgage.

For example, if your home is appraised at $300,000 and you owe $200,000 on your first mortgage, you may be able to borrow up to $40,000. That is because 80% of $300,000 is $240,000, and $240,000 minus $200,000 equals $40,000.