On a standard fixed-to-fixed IRRRL, the rate has to drop at least 0.5%. That floor is federal law, but it is usually not what decides whether the refinance makes sense. The rate-reduction rules, set by statute (38 U.S.C. 3709): - Fixed to fixed: at least a 0.5% reduction. - Fixed to ARM: at least a 2% reduction. - ARM to fixed: no rate-reduction floor. Moving from an adjustable to a fixed rate counts as a net tangible benefit on its own. The real gate is recoupment. All fees and costs of the refinance must be scheduled to be recouped within 36 months of loan issuance through your monthly savings. A small rate improvement can clear the 0.5% floor and still fail recoupment if the costs are high relative to the savings. So run the recoupment math first: total costs divided by monthly savings, landing inside 36 months. That number decides whether the IRRRL is worth doing, and it is exactly what we can run with you in the free Roadmap conversation.