(MONEY Magazine) – Rare is the moment when a major consumer expense is rolled back to the level it stood at nearly 40 years ago, when Elvis was an unknown and a typical house went for $8,000. But that's what's happened to mortgages. Many are back to an Ike-like 4% or so. A glance at the table on page 50 shows 15 of the 24 leading lenders listed offering 30-year adjustable-rate mortgages at 4.5% or less. And three of the deals are actually below 4%. Mortgages may not get this affordable again for another generation -- and that's no exaggeration! Of course, 40 years ago all mortgages had fixed rates. So home buyers locked in their monthly payments. By contrast, these 4% ARMs carry some risk. If prevailing interest rates start climbing a couple of points a year, you could find yourself paying as much as 80% more than you originally planned on a $100,000 loan. Still, despite the risk, many of today's 4% ARMs are better deals than the average 8% fixed-rate loan for home buyers as well as homeowners looking to refinance. Even with a 4% ARM for $100,000 that moved up the usual maximum of two points a year to a typical 10% cap in the fourth year, you would be $2,500 ahead after five years. Therefore, if you're likely to move in five to seven years -- like typical homeowners -- these 4% ARMs can be great for you. On the other hand, if you figure to stay put or simply can't stomach the idea of fluctuating payments, 8% fixed mortgages are attractive too. Fixed rates haven't been this low since 1973. Luckily, there is time for the thinking and shopping you should do before choosing between ARMs and fixed -- but not too much time. Says Michael Sumichrast, publisher of Real Estate Perspectives in Rockville, Md.: ''Rates may drop another quarter-point by December -- and then move up as much as a point a year after the election.'' Here is what you need to know about today's low-rate mortgages: -- Going for an ARM. Never forget that the fabulous 4% rate is guaranteed for only the first year. Then it is subject to annual adjustments -- probably up -- by as much as two points. To prevent lenders from letting marginal borrowers take on more debt than they will be able to handle, Fannie Mae instructed banks late last year to qualify only borrowers who could afford at least a 7% rate. So even though ARM payments start as low as $477 a month on a $100,000 30-year loan, you must show the lender you could pay $665. Also, beware of wandering into a dismal swamp of special fees and caps designed to inflate the loan's cost. PaineWebber Mortgage in Maryland, for example, is offering an adjustable-rate mortgage at an attractive 4.38% -- but you have to pay 5% of the loan's balance in closing costs. Also watch for towering lifetime caps: Williamsburgh Mortgage in New York City can grow its gentle 4.5% offer into a ferocious 14.5% giant over time. You want a lifetime cap that's no higher than six points above the initial rate, two-point annual caps and no more than about two points up front. -- Going for a fixed rate. Monthly payments on a typical 8.1% fixed-rate loan of $100,000 stand at $741, down from $965 for the same amount at 11.17% as recently as April 1989. For even greater savings, weigh an interest-busting 15-year mortgage, offered by most lenders. Payments on a 15-year $100,000 mortgage at the national average interest rate of 7.62% come to $934. Or look into a 20-year version, now marketed by eight banks, including Norwest Mortgage in Des Moines. At the average rate of 8.06%, monthly charges on a 20- year loan are a more affordable $840. The bottom line: While interest on the 30-year loan comes to $166,376, it is $101,706 on the 20-year one and only $68,068 on the 15-year version. You can cut long-term costs this way too: Negotiate to pay extra points in return for a lower rate (though such negotiating may be impossible when shopping for an ARM). Typically, an 8.5% rate with no points is equivalent to an 8% deal with three points. After about seven years, the savings on a $100,000 30-year loan at 8% will more than compensate for the points. Some banks will let you borrow at the lowest rate prevailing during the 30- to 60- day application process. Shop for a lender who won't charge you extra points for this feature.

-- Tips for refinancers. Start by applying the old 2% rule: Refinancing may pay off if the new rate is two percentage points below the old one. So if you're sitting on a 10% mortgage, do some math based on how long you plan on staying in your home. Say you took out a $100,000 fixed-rate loan in 1989 at 10%, and you decided to refinance this year to one at 8%. Closing costs on the new loan come to roughly $3,000. But you would chop your monthly payment by 18%, from $878 to ! $720, and break even on the closing costs after around 19 months. After three years, you would be ahead $2,686; after seven years, $10,270; and after 30 years, $53,878. If you refinanced instead to a 30-year ARM at 4% with $3,000 in closing costs, you would slash your monthly bill nearly in half to $469 in the first year, breaking even on the closing costs in only seven months. And even if that ARM rate moves up two points a year, to max out at a 10% cap in the fourth year, and stays there for the 30-year term, you'd still save $19,499 more than the old 10% loan.

BOX: COMMON LOAN INDEXES

Prime rate 6.00% One-year Treasury constant maturity 3.64% 11th District cost of funds 5.26% National mortgage contract rate 7.78%

Note: Prime rate is as of Sept. 3. Averages are for July, June and July, respectively. Source: HSH Associates. For the latest information on mortgage rates in your area, plus a kit that will help you select the right loan, call toll-free for MONEY Magazine's Mortgage Match at 800-243-8474. Cost: $29.95

CHART: NOT AVAILABLE CREDIT: Source: Veribanc CAPTION: THE BEST SAVINGS YIELDS IN THE U.S.

CHART: NOT AVAILABLE CREDIT: Source: Bank Rate Monitor CAPTION: THE BEST CREDIT CARDS IN THE U.S.

CHART: NOT AVAILABLE CREDIT: NO CREDIT CAPTION: LEADING CAR LOANS IN THE LARGEST METRO AREAS

CHART: NOT AVAILABLE CREDIT: Source: HSH Associates CAPTION: LEADING HOME-EQUITY LINES IN THE LARGEST METRO AREAS LEADING 30-YEAR ADJUSTABLE-RATE MORTGAGES LEADING 30-YEAR FIXED-RATE MORTGAGES