In this paper, a motor specific fault severity assessment method is proposed to calculate the amplitude of magnet defect fault signatures in the stator current and back-electromotive force (EMF) through machine and controller parameters of permanent magnet synchronous motor (PMSM) drive. A detailed mathematical analysis is developed based on the linear model of PMSM to predict the behavior of fault signatures in motor variables at various operating points. In order to understand and decouple the effects of motor controllers and operating points, the derivations are further extended to clarify the effects of current loop gains. Under the light of findings, the fault severity impact on the current and back-EMF fault signatures is investigated exhaustively. For this purpose, the fault intensity imposed to a motor is increased in four steps by removing 25% of one magnet at each step. Throughout each fault level, the changes in the corresponding spectrums are analyzed, which provides an essential information to design accurate threshold tominimize false alarms. The theoretical derivations are validated through comparative finite element analysis (FEA) simulations and experiments.