I have made a new material, where I do my own refraction calculation. It seems as if the Unreal Engine does the refraction step last, while it should be first.
I went a step further, to make the refraction also depend on the depth of the object. So that objects near the surface hardly get distorted. makes sure that objects half-way in the water don’t get disected.
Another thing is that I blend the colors of underwater objects by modulation instead of alpha blending, which gives much more realistic water.
See my material in attached image:
Also check out my custom specular lighting material. Now you’re all set for realistic water!