I applaud the efforts to pay down debt, as it may give you more flexibility financially, on top of saving on interest from the loan. Also, paying off a home mortgage carries emotional satisfaction beyond just the numbers. Without knowing more about your overall financial situation I can't say for sure if using the mutual fund to pay it off is the best course of action, but I hope to give you a few things to consider for your decision.
What was the original goal of the mutual fund? Take a moment to remember why you invested in the fund, and if that goal still exists. If originally you wanted to use this to help purchase or payoff a home, you may be on the right track. If taking money out of it derails the original goal, you need to take that into account.
How's my Emergency fund doing? I'd want you to be carrying at least 3-6 months of your living expenses in an accessible, safe account like a savings account or money market fund. This makes sure you are prepped for financial curve balls that may come your way. If this mutual fund is functioning all or in part as your emergency fund, you likely want to wait on draining it to pay off the house.
What are my monthly expenses like currently? Do you have any major changes coming up for either your monthly income or expenses? Many people heading into retirement are facing a drop in their income, so lowering the monthly expenses by eliminating the mortgage payment may make sense.
Check the numbers - From a pure math standpoint, you want to compare the interest rate you are paying on the loan with what you can reasonably expect in returns from the mutual fund. If you have a fund that could earn you 6-10% in returns on average, but a mortgage that is 4-5%, you may earn more net dollars from keeping the investment. The big caveat is that you probably know the interest rate on the mortgage, but can not be assured that your mutual fund won't go up or down in any given year.
Take stock of your overall assets. How are other investment goals like retirement doing? Is the mutual fund a small or large part of your overall investments and assets? Will you need it to help fund your income in retirement, or is it a small part of the overall plan? A mutual fund can likely be used for multiple things, but re-accessing the equity in a paid off home may be harder to do.
What's my time frame? How long do you plan on living in the home? Be sure to weigh how long it will take to pay off the home with regular payments versus a lump sum from your mutual fund. It may be that you could do a little bit of extra payments, and take money from the mutual fund in a few years as well.
Again, not knowing more about your situation I can't say for sure, but I'm of the mentality to be looking for ways to say yes on paying the home off, be it all at once or making extra payments over time.
Thanks, and good luck!