TORONTO, March 21 (Reuters) - Canada's Bank of Montreal ( BNKD )

has changed some terms of its mortgage process for

steel and aluminum business owners, a memo sent to its brokers

shows, as U.S. tariffs stoke uncertainties in the industry.

The lender said in the memo this week that borrowers' total

debt service ratio - the percentage of monthly household income

that covers housing costs and other debts - will be reduced to

42% from 44%, meaning the borrower will have more room to manage

their housing budget and a smaller mortgage.

BMO also added the steel and aluminum sector to its list

of industries that are more prone to risk.

"With newly announced tariffs between Canada and the United

States, and consideration to the turbulent economic landscape,

BMO BrokerEdge has reviewed its risk appetite for

tariff-impacted industries," the memo said.

"As a result, we have revised our temporary lending criteria

for self-employed borrowers."

Canada, the biggest foreign supplier of steel and aluminum

to the United States, announced this month 25% retaliatory

tariffs on goods including steel, aluminum, computers, sports

equipment and other products in response to U.S. President

Donald Trump's tariffs on Canadian-made steel and aluminum.

Steel manufacturers in Canada have said that the tariffs

will cause grave concern for Canadian steel workers and have

asked the government to support the industry.

A spokesperson for BMO said the measures would not impact

workers and were meant to protect customers' long-term financial

health.

Policy adjustments are normal course procedure that reflect

multiple inputs including the macroeconomic environment, the

lender said.

The list, called limited appetite industries, also includes

utilities, construction, and transportation as areas where the

lender has a slightly reduced tolerance.

BMO is the first bank in Canada to take such an action in

response to the trade war.

Toronto-based mortgage broker and owner at Integrated

Mortgage Planners, David Larock, said the change was minor and

expects other lenders to make similar adjustments.