Adjustable-rate mortgages, one of the main culprits of the housing crisis, are back in vogue. But banks say this time is different.

Financial groups are sweetening terms to entice customers to take out these loans, known as ARMs, whose rates can jump after a few years. Some ARMs are cheaper, when compared with fixed-rate mortgages, than they have been in more than a decade.

The tactics are reminiscent of the period before the 2008 crisis, when ARMs exploded in popularity as banks and mortgage brokers touted their low initial rates to consumers.

ARMs comprised 31% of mortgages in the $417,001-to-$1 million range that were originated during the fourth quarter of 2013, according to data prepared for The Wall Street Journal by Black Knight Financial Services, formerly Lender Processing Services, a mortgage-data and services company. That is up from 22% a year earlier and the largest proportion since the third quarter of 2008.Now, though, financial executives say they are focusing on borrowers with strong credit who are using the loans to take out large "jumbo" mortgages—and not so-called subprime borrowers, who used the loans to stretch their buying power as far as it could go.

On mortgages of more than $1 million, 61% were ARMs, up from 56% a year earlier.

"We're seeing a shift back to ARMs," says Mike McPartland, head of investment finance for North America at Citi Private Bank, a unit of Citigroup Inc. C +1.37% "My opinion is, it's going to continue."

Banks are betting rates will rise high enough for them to offset any interest they give up in the first few years. Borrowers are betting rates will either stay relatively low, or that they will sell their homes before their interest adjusts higher.

Last month, Richard Herrmann of Fairfax County, Va., refinanced out of a 30-year fixed-rate mortgage with a 4.875% rate into an ARM with a fixed interest rate of 2.875% for the first five years. The loan rate resets every five years. Mr. Herrmann, a 59-year-old engineer for the U.S. military, and his wife plan to sell their home in 10 years, so they are only expecting to incur one rate reset.

"It's always a crapshoot with an ARM," said Mr. Herrmann. "This seemed to be the best compromise."

While lenders say this time they are employing tough lending guidelines and focusing on top-rated borrowers, there are signs they are broadening the pool of eligible customers.

Some smaller lenders such as credit unions are targeting retirees and other borrowers who are looking for superlow rates. And banks increasingly are offering interest-only ARMs, which require customers to make payments only on the interest for as long as 10 years, and which were among loans that caused problems for subprime borrowers during the crisis.

-By ANNAMARIA ANDRIOTIS and SHAYNDI RAICE - WallStreetJournal.com