Is "mutt" a deragatory word for a mixed-breed dog?

Yesterday, my husband suddenly decided he thinks it is. Our daughter was cleaning the dog’s eyes last night and talking to her to soothe her. She said, “it’s okay you sweet little mutt-mutt” and he told her it is mean. She was confused and, frankly, so am I.

We’ve had the dog two years and all three of us, including my husband, have used that term before. We’ve never meant it in a mean or teasing way.

Looking online, it seems an acceptable term for a dog but is, of course, derogatory when used toward people. I’m curious to hear what the jellies think.