I completely lost interest in sex during the first six to seven months of hrt. At month seven, when I switched from spironolactone to androcur, and from oral estradiol to injectable estradiol, I actually decided to perform a rather perfunctory masturbation experiment, to see if there was anything left. All very scientific lol.
Well, after that my sex-drive actually sky-rocketed. It was strange, yet wonderful, because my testosterone levels by then were well within female range. Sex and masturbation are completely different now - my entire body tingles, from my organs to my skin - it's not just a genital thing anymore. And I also yearn for closeness and cuddling.
My genitals have indeed become marginally less sensitive, and it takes a LOT more work to achieve orgasm, but when I do - oh wow - it's 100 times better than anything I experienced before HRT. And besides, although my genitals are less sensitive, the rest of my body has a heightened sensitivity which more than makes up for that loss of sensitivity in the genital region.
It's totally true that it's all in your mind. You have to really want it and work at it when you hardly have any T in your system, but when you do make the effort, it can be amazing.