This paper examines how monetary policy impacts households in the euro area, focusing on a less-studied aspect of policy transmission. It emphasizes the significant role of both banks and non-bank financial institutions in influencing household borrowing, saving, and spending decisions. While monetary policy demonstrates overall effectiveness, the transmission of policy rates to household borrowing costs is neither complete nor uniform across the euro area. This incompleteness stems from variations in how institutions fund themselves, their market power, and their specific operating environments. A crucial finding is that household characteristics deeply influence policy transmission. Disparities in households' financial health, access to credit, and housing market conditions lead to varied effects across different income, age, and wealth demographics. These uneven impacts have significant consequences for overall demand and income distribution. Furthermore, research indicates that certain consumption categories react more swiftly to interest rate shifts than previously understood. This rapid response is particularly pronounced in situations involving high household debt and variable interest rates. The findings collectively suggest that a comprehensive, system-wide approach is necessary for evaluating monetary policy transmission. This approach must incorporate various aspects of the financial system and acknowledge household heterogeneity. The research also underscores the importance of accessible, detailed data for uncovering these novel insights.