The armorial was discovered in pieces embedded in Tudor Cottage, in Hanwell near Banbury in March, as builders were taking walls down.
Measuring 2m x 2m (6ft x 6ft) the coat of arms features fleur-de-lys, lions, and griffins or dragons.
It was under the hammer at an auction at JS Auctions, Banbury and expected to fetch between £5,000 and £10,000.
The stone sculpture is believed to be an over-mantle, carved sometime after 1525.
It is thought the stones came to be in the walls of the cottage because of the likelihood it was built using discarded material from Hanwell Castle.
The castle, originally called Hanwell House or Hall, was partly demolished in the 18th Century.
A carved stone Tudor royal coat of arms found in the walls of an Oxfordshire cottage has sold for £8,000.