The height you show in the picture actually looks pretty good. Here are some thoughts to consider when hanging artwork etc. on the walls...

As in this case, the mirror is meant to be hanging over the fireplace, therefore it should connect with it. It's not meant to just fill the space, so centering on the space isn't necessarily the right approach, (even though for your fireplace it looks that it's centered on the wall regardless) But basically, you should think about the mirror as centering over the fireplace instead of the wall space.

And then for the height, the mirror or artwork needs to be between 6-12" above the mantel to visually connect to it.

It's totally OK, and I recommend, setting something on the mantel that will be tall and overlap the mirror.

Here are some tips I've written about hanging artwork etc.

Hope that helps... Liz

www.HometoCottage.com