Home equity is calculated by subtracting the amount of money you still owe on your house from the total value of your home. For example, if your home is valued at $300,000 and you owe $200,000 on your mortgage, your current equity is $100,000.
Most lenders will require you to have 10-20% of your home value remaining after you get your HELOC. So, in this example (depending on your creditworthiness and debt-to-income ratio) you could qualify for a HELOC of $40,000 with 20% of your home value remaining.
$100,000 (current equity) - $40,000 (HELOC amount) = $60,000 (20% of property value).