A home equity loan works by letting you borrow a lump sum of cash based on the market value of your property minus what you still owe on your mortgage. Lenders typically allow you to borrow up to eighty five percent of your total home equity. You receive all the funds at once and pay them back in equal monthly installments over a set period ranging from five to thirty years. Because your home acts as collateral, failing to keep up with payments puts your house at risk of foreclosure.