The median interest rates offered by community banks and credit unions rose in the first half of 2022 amid the Federal Reserve's effort to tame inflation via monetary policy tightening.

Rate hikes on 15-year and 30-year fixed mortgages offered by community banks and credit unions were higher than rate hikes on other products, such as new auto loans, used auto loans, and home equity lines of credit, according to the S&P Global Market Intelligence data.

Community banks include operating U.S. commercial banks, savings banks, and savings and loan associations below $10 billion in total assets as of March 31, 2022. The middle-tier and ultimate parent must also be below $10 billion in assets for the most recent quarter reported. Nondepository trusts and banks with a foreign banking organization charter are excluded.

Credit unions include operating U.S. credit unions below $10 billion in total assets as of March 31, 2022.

Analysis limited to companies with loan-to-deposit ratios greater than 40%.

Mixed trends

Credit unions continued to offer lower rates on auto loans in the first half of the year compared to community banks. Median interest rates on auto loans offered by community banks returned to their 2020 levels, up from their 2021 sector medians.

The credit union median interest rate was 2.99% for both new and used car loans on July 1, compared to 2.79% for 60-month new-car loans and 2.74% for 36-month used-auto loans on July 2, 2021.

Meanwhile, community banks and credit unions offered identical median interest rates on 15-year fixed-rate mortgages through the first half of the year at 4.88%. For 30-year fixed-rate mortgages, community banks offered a median 5.50%, compared to 5.63% at credit unions.

For 2021, both community banks and credit unions offered median 15-year and 30-year fixed-rate mortgages of 2.50% and 3.13%, respectively. In 2020, community banks and credit unions offered an identical 3.38% on 30-year fixed-rate mortgages, but credit unions offered a median 2.88% on 15-year fixed-rate mortgages, compared to 3.00% at community banks.

Mid-Atlantic and Midwest lead the way

Community banks and credit unions in the Mid-Atlantic and Midwest regions offered some of the highest interest rates on fixed-rate mortgage products through the first half of the year, compared to rates in the Northeast, Southeast, Southwest and West regions.

The median interest rates offered on 15-year fixed-rate mortgages in the Mid-Atlantic region were 4.88% and 4.86% at community banks and credit unions, respectively. For 30-year fixed-rate mortgages, Mid-Atlantic credit unions and community banks both offered a median rate of 5.50% during the first half of the year.

*View U.S. industry data for commercial banks, savings banks, and savings and loan associations. *Click here for a template on depository interest rates by region.

In the Midwest, community banks offered median interest rates of 4.48% and 5.50% for 15-year and 30-year fixed-rate mortgages, respectively, during the first half. Midwest credit unions offered rates of 5.00% and 5.63% for 15-year and 30-year fixed-rate mortgages, respectively, over the same time period.

Interest rates at top community banks and credit unions by total loans and leases

As of March 31, Souderton, Pa.-based Univest Bank and Trust Co. offered the highest interest rate for 60-month new-car loans at 8.0%. Among credit unions in the category, North Liberty, Iowa-based GreenState CU offered the highest rate for the same segment at 4.95%. The national average rate among community banks and credit unions for new-car loans as of March 31 was 4.30%.

Chubbuck, Idaho-based Idaho Central CU offered the highest interest rate for 15-year fixed-rate mortgages among the top credit unions at 5.13%. Among the top community banks, Youngstown, Ohio-based Premier Bank offered the highest 15-year fixed-rate mortgage at 5.13%, as of March 31.