Hi LQ.org! Linux v4.1 has new feature — filesystem level encryption. Is it suitable for encrypting home dir in a way where when loading Arch Linux it will prompt for passphrase to get access to ~ and if passphrase cannot be entered you don't get access to ~ files?

FWIW: I have done some test trials involving one form (LUKS) of encryption and different file systems. It is interesting how they interact.
My results would indicate that, yes, it is suitable for home folder encryption. Or entire file system encryption.

There are, however, I/O penalties that are more than what I have seen described elsewhere. Advantage goes to a box with FAR more ram than you expect to need, that made more difference than minor CPU variations. Advantage to ext4 over xfs, or most other journalled formats.

The company owns the test results, so I cannot share them here. If I get time to do somewhat similar tests on my home systems I will be glad to post the results.

Some distros now enable home folder encryption by default. I prefer to run without it and keep any HIPAA data in another and more secured location.

The ext4 encryption is supposed to alleviate the memory footprint issue, but I haven't tested for it.
I note that the 4.1 Fedora kernel doesn't have all the options set. And no new e2fsprogs.

I'll check Arch later - but it looks like not all the necessary parts are there yet. And no note from Ted on the ext4 wiki either. Hmmmm.