What is 'Capitilised Interest'?

I borrowed back some funds from an overpaid (Interest 0nly)mortgage last year. I paid back half of the borrowed amount in Dec. Ihave today recieved an annual statement wich shows a debit figure of £1500.00 for 'Capitalised Interest'.
There was no mention of penalties when I arranged the borrow bank, so I am baffled as to what this is for - and why I have been charged. I can find no mention of it in the paperwork!.Can anyone advise?
Thanks,
Meg.