AMSI methodology

The Australian Mortgage Stress Index (AMSI) is a synthetic national indicator of mortgage stress conditions across Australian households. It combines repayment pressure, interest-rate sensitivity, labour-market conditions, and borrower resilience into a single 0–100 score so you can track how aggregate stress conditions change over time.

AMSI is an analytical indicator only. It is not financial advice and does not recommend or advise any financial decision. You remain responsible for your own decisions. The index is designed to inform understanding of aggregate conditions, not to replace professional advice or lending assessments.

• Not financial, investment, or lending advice.
• Not a forecast of arrears or defaults for any specific portfolio or household.
• Not a substitute for loan-level or household-level assessment.
• Not a tool for approving, declining, or pricing loans.

Use AMSI as context for national conditions. Do not rely on it alone for any personal or institutional decision.

AMSI is built from high-level inputs that influence mortgage stress at an aggregate level. These include:

• Interest rates — cash rate and mortgage rates that affect repayment burden.
• Labour market — unemployment and wage growth as proxies for ability to service debt.
• Inflation — cost-of-living pressure that affects real disposable income.
• Housing and credit conditions — house prices, mortgage rates, and arrears where relevant.
• Household buffers — savings and equity that affect resilience to stress.

How these are combined into the final score uses a consistent methodology; specific weights and calibration are not published.

The index is reported on a 0–100 scale. Higher values indicate higher aggregate stress; lower values indicate more stable conditions. The dashboard uses four bands to make the reading easier to interpret:

• GREEN (low) — stress conditions are relatively contained.
• AMBER (moderate) — conditions warrant attention but sit in a moderate range.
• RED (elevated) — stress is meaningfully elevated.
• BLACK (high) — conditions are at the upper end of the scale.

The share of households in each band is shown on the dashboard so you can see both the headline score and the mix across stress levels. The estimated borrower fragility distribution uses the same four bands with descriptive labels: Stable (GREEN), Fragile (AMBER), Stressed (RED), Severe Stress (BLACK).

The historical chart gives context for today’s reading. Comparing current conditions to past stress periods (for example, the global financial crisis or the COVID shock) helps you judge whether the index is high or low relative to history. The historical series uses the same scoring logic and the same GREEN/AMBER/RED/BLACK bands as the current index. Some historical points are based on provisional data and may be refined as better sources are incorporated.

AMSI is updated periodically as source data is released (typically monthly). The dashboard shows the as-of date of each snapshot and, when set, the expected next update. Revisions to underlying data may lead to revisions in past readings; the index reflects the best available information at each update.

AMSI is a simplified, aggregate indicator. Keep these limitations in mind:

• Model simplification — the index summarises complex conditions into a single score; real-world stress varies by household, region, and loan type.
• Data lag — inputs rely on published statistics that are released with a delay; the index does not use real-time or proprietary loan-level data.
• Revisions over time — source data (e.g. from the RBA or ABS) is often revised; past AMSI values may be updated when inputs are revised.
• Not household-specific — AMSI is national and aggregate. It does not describe any individual household or loan and must not be used as household-specific advice.
• Historical placeholders — where historical data is provisional or placeholder, those points may be updated as better sources are wired; treat historical comparisons as indicative.

The index is aggregate only; actual outcomes for households will depend on many factors not captured in the model.

Use the headline score and band (GREEN/AMBER/RED/BLACK) to gauge the level of aggregate stress. Use the stress distribution to see the mix across bands. Use the historical chart to compare with past episodes. Treat AMSI as one input to your thinking—not as a substitute for professional advice or your own judgment.