Interest will accumulate on the total borrowed whereas if you were paying your monthly payment, the capital would be decreasing and likewise the interest due. I was a bank official for many years and it appears that the mortgage was probably set up with a "payment holiday" or some concessions for the 1st year, perhaps in error however, there is always the likelyhood, knowing banks methods intimately, that surcharges could be accrueing. It would be in your best interests to establish that the Bank are in error firstly and set up payment asap.