Home equity loans, often referred to as second mortgages, allow homeowners to borrow against the equity they have built in their property. Equity is determined by subtracting the remaining balance on the mortgage from the current appraised value of the home. Home equity loans typically come with fixed interest rates and are repaid in equal monthly installments over a set period of time, making them similar to traditional mortgage loans. Homeowners often use these loans for major expenses such as home improvements, education, debt consolidation, or other significant costs, offering the advantage of lower interest rates compared to unsecured loans due to the collateral provided by the property.