This paper quantifies mechanisms through which heterogeneity in household finances affects the transmission of monetary policy, considering housing tenure choices over the life cycle. Our analysis also identifies challenges for monetary policy related to housing busts. It focuses on the four largest economies in the Euro area: France, Germany, Italy, and Spain. Through the lens of our model, we find that home ownership and endogenous transitions from renting to owning are key elements for the extent of cross-country asymmetries in aggregate consumption responses to changes in the real interest rate. Across groups with different housing tenure, we find that the consumption response of homeowners to interest rate changes tends to be larger than the response of renters, particularly if these homeowners are indebted and do not adjust their illiquid housing wealth.