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How many years would a loan have to be before it would just be considered rent? Is that the plan? Never let anyone own anything, just keep paying "rent"?
The amortization length affects proportion of principle paid down, but it doesn't eliminate it entirely. At the same interest rate, you end up having paid more in interest at maturity of a longer amortization, yes. In practice, this can be mostly mitigated by negotiating a lower rate, or negotiating and exercising prepayment privileges.
More importantly, with a mortgage, ownership of the property is yours entirely, from day one, not the lenders'. What you owe is cash, not the property. The property is merely collateral in the event of default of payment.
BTW, multi generational loan agreements are not new. They are somewhat common historically and in other places of the world. For the same reason that multigenerational housing is the historical norm.
Doing this with baloon frame mcmansions built by shady developers in dubious places with undocumented workers and you have a recipe for insurance claims and foreclosures.
But won't the rate be higher, like 30 year rates are higher than 15 year rates? I don't know much about economics but I remember that being a thing when I was looking at mortgages. I assume it has to do with long-term risk for the lender.
Also, how many people actually stay in a home for 50 years without moving? I know my earlier house payments had a larger portion going to interest (I assume this is a math thing?) than my more recent payments, therefore you build equity really slowly at first, meaning you're not building enough equity to even cover the costs of the ownership or the cost to sell unless you stay in place for a long time.
I'm just a dummy but this feels like a scary thing and not a good thing.
I'd think of it more as a way to lock in housing costs, rather than a way to buy a home. For example, I bought my condo 5 years ago. My apartment rent was say $2200/month including fees. My condo was $2000/month including fees, with a 15-year mortgage.
Five years later and my old apartment is listed for $3100/month. My condo is only $2200/month (fees went up).
I expect the spread to get worse over time.
Edit: not sure the cost would be lower enough monthly to justify the extra interest, but maybe there's an edge case where it makes sense?