What does “3 months interest” mean?

Most mortgage payments are comprised of 2 parts. The first is the principle – this pays down the loan and reduces how much you owe going forward. The other is the interest – this is the nice expensive thank-you that you reward to the bank for giving you all that dough to begin with. Multiply that interest payment by 3, and you have a very close idea to what your “3 months interest” penalty will be.