If it's applied to the interest, it takes $2 off the total because you're always paying off the last month first. (Yes it's predatory and that's how mortgages work) If it's applied to the principal it takes off $2 plus the interest that would have accrued on that $2 from the time of payment to the time you finally pay it off completely.

Unless I'm wrong. I'm not an expert. But we paid off the mortgage for our condo early (got a windfall) and that's how I understood what I was told at the time. It's a reason some loans have a prepayment penalty; don't get one of those.