When Your Job Impacts Your Mortgage: What BMO’s Policy Shift Says About Lending in 2025

A permanent, full-time job has long been seen as the gold standard when applying for a mortgage. But in 2025, job stability means more than just a steady paycheque — it now includes the industry you work in, how exposed it is to economic risk, and how lenders perceive that risk.

The latest example? BMO’s recent policy tightening for steel and aluminum workers in response to new U.S. trade tariffs. It’s a move that’s raising eyebrows and signaling that in today’s lending environment, your job title might matter less than your job sector.

BMO’s New “Limited Appetite” Policy Explained

In a memo to brokers, BMO announced that self-employed borrowers in the steel and aluminum industries will now face stricter underwriting criteria. These include:

• A reduced TDS (Total Debt Service) ratio limit of 42% (down from 44%)

• A GDS (Gross Debt Service) cap of 39%

• A requirement for at least one applicant to have a credit score of 750 or higher

These changes place steel and aluminum alongside a growing list of sectors BMO classifies as having “limited appetite,” which already includes construction, retail, entertainment, and transportation, among others.

BMO defended the move in a statement, saying:

“It is very common practice for financial institutions to consider a wide range of macroeconomic factors — including industry types — when evaluating loan applications… The technical policy adjustment doesn’t apply to employees of companies and is only one of many factors when considering the applications of self-employed applicants.”

While this clarification narrows the impact to self-employed borrowers (for now), it clearly reflects growing caution within the lending world — especially when it comes to sectors impacted by global economic instability.

Why This Matters for Borrowers Across Canada

Even if you’re not in steel or aluminum, this policy change matters. It shows that lenders are watching industry-specific risk more closely than ever, and they’re willing to tighten guidelines when they see turbulence ahead.

This isn’t new — we’ve seen similar treatment for sectors like oil and gas, long-haul trucking, and real estate commission sales in the past. But what’s different in 2025 is the growing list of industries under the microscope, especially as trade disputes, tariffs, and global instability continue to unfold.

And while BMO’s announcement focuses on the self-employed, it’s fair to say that even salaried employees in “flagged” industries could face more questions or closer scrutiny — especially if they have a file that’s borderline in terms of credit, debt ratios, or documentation.

This Isn’t About You — It’s About Risk

To be clear, these policy changes aren’t a judgment of your work ethic, your income level, or your personal finances. They’re about risk management from the lender’s perspective.

If your industry is tied to volatile international trade dynamics (like steel, aluminum, auto manufacturing, or natural resources), a lender might worry about layoffs, reduced hours, or supply chain disruptions. And that concern shows up in stricter underwriting.

It’s not about your job title — it’s about how the economy might affect your employer (or your business) over the next five years.

How This Plays Out in the Real World

Here’s what this looks like in practice:

• A salaried employee at a manufacturing firm may still be approved, but may face more detailed employment verification, or require a stronger credit profile.

• A self-employed contractor in a tariff-impacted industry may be asked for more income history, tighter debt ratios, and a higher credit score — or may be redirected to a different lender altogether.

• A borrower with high debt levels, limited savings, or bruised credit, working in a “limited appetite” sector, may be declined even if they’re technically qualified under standard guidelines.

That last category — the borderline files — is where this matters most. When a lender is deciding whether to make an exception or not, industry exposure can be the deciding factor.

Why Transparency Is Better Than Silence

To BMO’s credit, they made their policy change publicly known. And while it’s received some criticism, I believe transparency is far better than the alternative — which is lenders quietly declining files without explaining why.

As a mortgage broker, I’d rather know upfront what a lender is or isn’t comfortable with. That way, I can position the file properly, prepare the client, or pivot to a more suitable lender.

The real concern is that other institutions may quietly follow suit without announcing similar changes. That leads to more confusion, frustration, and unpredictable outcomes for borrowers.

What You Can Do as a Borrower in 2025

If you work in an industry affected by tariffs, global trade, or economic volatility, here are a few steps you can take:

✅ 1. Get Pre-Approved Before You Shop

A pre-approval helps identify red flags early and gives you a clearer sense of what’s possible — and where you might need to strengthen your application.

✅ 2. Gather Strong Documentation

Lenders want to see a clear picture. Employment letters, T4s, NOAs, and business financials (if self-employed) go a long way.

✅ 3. Work to Improve Debt Ratios and Credit

Even a small improvement in your debt load or credit score can make a difference — especially if you’re in a flagged industry.

✅ 4. Lean on a Mortgage Broker

Not all lenders treat industries the same. Some may be more flexible, others more conservative. A broker can match your situation to the right lender, and help you navigate any extra hurdles.

Final Thoughts

BMO’s policy change is a small one — but it’s a signal. A signal that economic conditions, employment sectors, and global trade are now influencing mortgage approvals in real-time.

If you work in a sector that’s directly or indirectly affected by tariffs, or in one of the industries that lenders have historically flagged as “unstable,” it’s not cause for panic — but it is a reason to plan ahead, get advice early, and make sure your mortgage application is presented in the best possible light.

As a mortgage broker, I’m here to help with that. Whether it’s finding the right lender for your industry, helping you prepare a strong file, or offering strategies to get qualified in a tighter lending environment, my job is to make the path to approval as smooth as possible — no matter what the headlines say.