For months borrowers have been told to sit on floating rates which have been lower than most fixed terms.
But Mr Stephens says that given where he thinks interest are heading, he doubts there is much to be gained by waiting any longer before fixing.
Since mid-November Westpac had consistently said fixed rates were "currently good value", given where economists thought floating rates were heading.
"But we've also been saying 'There is no immediate pressure on fixed rates to rise so borrowers can afford to wait a little longer'.
"In other words, fixing was a good idea but waiting a while and then fixing was probably even better."
As it turned out, floating rates had remained low and fixed rates had fallen. Floating turned out to be the best strategy, Mr Stephens said.
But the the balance of risks had changed in the past few weeks. Swap rates had fallen in February.
Swap rates were similar to wholesale fixed interest rates and when they rose, retail rates tended to follow. If the higher swap rates were sustained, and Mr Stephens believed they would be, fixed mortgage rates would at least stop falling and could even rise.
"That makes now a very good time to fix."
Westpac regarded terms from two to four years as the best value. The long-held view by Mr Stephens had been that the rebuilding in Canterbury, among other forces, would generate inflation pressure.
The Reserve Bank, which would release its latest Monetary Policy Statement on Thursday, would eventually have to respond to that pressure by increasing its official cash rate (OCR).
That, in turn, would push floating mortgage rates higher, he said.
The cycle in floating mortgage rates would be significant, but more muted than the 2000s cycle.
"Financial markets have been blissfully unaware of the looming pressures on our economy. Long-term swap rates have been priced as though the OCR will be nudged only slightly higher over the next few years. This means only a few OCR hikes are required to make a strategy of fixing for two to four years worthwhile."
Another possible cause of higher mortgage rates was the European debt crisis, Mr Stephens said. The cost to New Zealand banks of raising funds overseas was now substantially higher than it was in mid-2011.
In Australia, higher bank funding costs had already been partially passed on to borrowers and savers. Interest rates there rose independent of the Reserve Bank of Australia's official rate.
"We have long warned that the same thing could happen in New Zealand; retail interest rates could rise without any change in the OCR."
The Reserve Bank of New Zealand had sounded a similar warning, he said.
