This is part of government-initiated moves to cut interest costs for households and give them greater room to expand spending as a means to boost sagging domestic consumption.
The FSC said the new home-backed loans will help household borrowers convert short-term floating interest rate loans into long-term, fixed-rate ones.
Sixteen local banks will start to provide the new loans from March 24. Banks currently require more than 3 percent for most home-backed loans.
The Korea Housing Finance Corp. will issue mortgage-backed securities to fund the new loans, the FSC said.
Those who own houses worth less than 900 million won are entitled to the new loan products, with the amount of loans per borrower capped at 500 million won.