diff --git a/Makefile b/Makefile
index c62408d8..131a3e72 100644
--- a/Makefile
+++ b/Makefile
@@ -100,7 +100,8 @@ test-bitcoin-lnd: test-bins
 	'Test_LndLnd_Bitcoin_SwapOut|'\
 	'Test_LndLnd_Bitcoin_SwapIn|'\
 	'Test_LndCln_Bitcoin_SwapOut|'\
-	'Test_LndCln_Bitcoin_SwapIn)'\
+	'Test_LndCln_Bitcoin_SwapIn|'\
+	'Test_LndLnd_ExcessiveAmount)'\
 	 ./test
 	${INTEGRATION_TEST_ENV} go test $(INTEGRATION_TEST_OPTS) ./lnd
 .PHONY: test-bitcoin-lnd
diff --git a/lnd/client.go b/lnd/client.go
index 45bc979a..2a9bbc87 100644
--- a/lnd/client.go
+++ b/lnd/client.go
@@ -77,6 +77,32 @@ func (l *Client) CanSpend(amtMsat uint64) error {
 	return nil
 }
 
+// getMaxHtlcAmtMsat returns the maximum htlc amount in msat for a channel.
+// If for some reason it cannot be retrieved, return 0.
+func (l *Client) getMaxHtlcAmtMsat(chanId uint64, pubkey string) (uint64, error) {
+	var maxHtlcAmtMsat uint64 = 0
+	r, err := l.lndClient.GetChanInfo(context.Background(), &lnrpc.ChanInfoRequest{
+		ChanId: chanId,
+	})
+	if err != nil {
+		// Ignore err because channel graph information is not always set.
+		return maxHtlcAmtMsat, nil
+	}
+	if r.Node1Pub == pubkey {
+		maxHtlcAmtMsat = r.GetNode1Policy().GetMaxHtlcMsat()
+	} else if r.Node2Pub == pubkey {
+		maxHtlcAmtMsat = r.GetNode2Policy().GetMaxHtlcMsat()
+	}
+	return maxHtlcAmtMsat, nil
+}
+
+func min(x, y uint64) uint64 {
+	if x < y {
+		return x
+	}
+	return y
+}
+
 // SpendableMsat returns an estimate of the total we could send through the
 // channel with given scid.
 func (l *Client) SpendableMsat(scid string) (uint64, error) {
@@ -96,7 +122,18 @@ func (l *Client) SpendableMsat(scid string) (uint64, error) {
 			if err = l.checkChannel(ch); err != nil {
 				return 0, err
 			}
-			return uint64(ch.LocalBalance * 1000), nil
+			maxHtlcAmtMsat, err := l.getMaxHtlcAmtMsat(ch.ChanId, l.pubkey)
+			if err != nil {
+				return 0, err
+			}
+			spendable := uint64(ch.LocalBalance * 1000)
+			// since the max htlc limit is not always set reliably,
+			// the check is skipped if it is not set.
+			if maxHtlcAmtMsat == 0 {
+				return spendable, nil
+			}
+			return min(maxHtlcAmtMsat, spendable), nil
+
 		}
 	}
 	return 0, fmt.Errorf("could not find a channel with scid: %s", scid)
diff --git a/swap/actions.go b/swap/actions.go
index d8b5e463..6d40b46c 100644
--- a/swap/actions.go
+++ b/swap/actions.go
@@ -579,6 +579,15 @@ func (r *PayFeeInvoiceAction) Execute(services *SwapServices, swap *SwapData) Ev
 		return swap.HandleError(err)
 	}
 
+	sp, err := ll.SpendableMsat(swap.SwapOutRequest.Scid)
+	if err != nil {
+		return swap.HandleError(err)
+	}
+
+	if sp <= swap.SwapOutRequest.Amount*1000 {
+		return swap.HandleError(err)
+	}
+
 	swap.OpeningTxFee = msatAmt / 1000
 
 	expectedFee, err := wallet.GetFlatSwapOutFee()
diff --git a/test/bitcoin_lnd_test.go b/test/bitcoin_lnd_test.go
index 93f49e90..b7dabbb2 100644
--- a/test/bitcoin_lnd_test.go
+++ b/test/bitcoin_lnd_test.go
@@ -1099,3 +1099,89 @@ func Test_LndCln_Bitcoin_SwapOut(t *testing.T) {
 		csvClaimTest(t, params)
 	})
 }
+
+func Test_LndLnd_ExcessiveAmount(t *testing.T) {
+	IsIntegrationTest(t)
+	t.Parallel()
+	t.Run("exceed_maxhtlc", func(t *testing.T) {
+		t.Parallel()
+		require := require.New(t)
+
+		bitcoind, lightningds, peerswapds, scid := lndlndSetup(t, uint64(math.Pow10(9)))
+		defer func() {
+			if t.Failed() {
+				pprintFail(
+					tailableProcess{
+						p:     bitcoind.DaemonProcess,
+						lines: defaultLines,
+					},
+					tailableProcess{
+						p:     lightningds[0].DaemonProcess,
+						lines: defaultLines,
+					},
+					tailableProcess{
+						p:     lightningds[1].DaemonProcess,
+						lines: defaultLines,
+					},
+					tailableProcess{
+						p:     peerswapds[0].DaemonProcess,
+						lines: defaultLines,
+					},
+					tailableProcess{
+						p:     peerswapds[1].DaemonProcess,
+						lines: defaultLines,
+					},
+				)
+			}
+		}()
+
+		var channelBalances []uint64
+		var walletBalances []uint64
+		for _, lightningd := range lightningds {
+			b, err := lightningd.GetBtcBalanceSat()
+			require.NoError(err)
+			walletBalances = append(walletBalances, b)
+
+			b, err = lightningd.GetChannelBalanceSat(scid)
+			require.NoError(err)
+			channelBalances = append(channelBalances, b)
+		}
+
+		lcid, err := lightningds[0].ChanIdFromScid(scid)
+		if err != nil {
+			t.Fatalf("lightingds[0].ChanIdFromScid() %v", err)
+		}
+
+		params := &testParams{
+			swapAmt:          channelBalances[0] / 2,
+			scid:             scid,
+			origTakerWallet:  walletBalances[0],
+			origMakerWallet:  walletBalances[1],
+			origTakerBalance: channelBalances[0],
+			origMakerBalance: channelBalances[1],
+			takerNode:        lightningds[0],
+			makerNode:        lightningds[1],
+			takerPeerswap:    peerswapds[0].DaemonProcess,
+			makerPeerswap:    peerswapds[1].DaemonProcess,
+			chainRpc:         bitcoind.RpcProxy,
+			chaind:           bitcoind,
+			confirms:         BitcoinConfirms,
+			csv:              BitcoinCsv,
+			swapType:         swap.SWAPTYPE_OUT,
+		}
+		asset := "btc"
+
+		_, err = lightningds[0].SetHtlcMaximumMilliSatoshis(scid, channelBalances[0]*1000/2-1)
+		assert.NoError(t, err)
+		// Swap out should fail as the swap_amt is to high.
+		// Do swap.
+		ctx, cancel := context.WithCancel(context.Background())
+		defer cancel()
+		_, err = peerswapds[0].PeerswapClient.SwapOut(ctx, &peerswaprpc.SwapOutRequest{
+			ChannelId:  lcid,
+			SwapAmount: params.swapAmt,
+			Asset:      asset,
+		})
+		assert.Error(t, err)
+	})
+}
diff --git a/testframework/clightning.go b/testframework/clightning.go
index 7493999c..a11c2f24 100644
--- a/testframework/clightning.go
+++ b/testframework/clightning.go
@@ -11,6 +11,7 @@ import (
 	"time"
 
 	"github.com/elementsproject/glightning/glightning"
+	"github.com/elementsproject/peerswap/lightning"
 )
 
 type CLightningNode struct {
@@ -519,3 +520,38 @@ func (n *CLightningNode) GetFeeInvoiceAmtSat() (sat uint64, err error) {
 	}
 	return feeInvoiceAmt, nil
 }
+
+type SetChannel struct {
+	Id                       string `json:"id"`
+	HtlcMaximumMilliSatoshis string `json:"htlcmax,omitempty"`
+}
+
+type ChannelInfo struct {
+	PeerID                    string            `json:"peer_id"`
+	ChannelID                 string            `json:"channel_id"`
+	ShortChannelID            string            `json:"short_channel_id"`
+	FeeBaseMsat               glightning.Amount `json:"fee_base_msat"`
+	FeeProportionalMillionths glightning.Amount `json:"fee_proportional_millionths"`
+	MinimumHtlcOutMsat        glightning.Amount `json:"minimum_htlc_out_msat"`
+	MaximumHtlcOutMsat        glightning.Amount `json:"maximum_htlc_out_msat"`
+}
+
+type SetChannelResponse struct {
+	Channels []ChannelInfo `json:"channels"`
+}
+
+func (r *SetChannel) Name() string {
+	return "setchannel"
+}
+
+func (n *CLightningNode) SetHtlcMaximumMilliSatoshis(scid string, maxHtlcMsat uint64) (msat uint64, err error) {
+	var res SetChannelResponse
+	err = n.Rpc.Request(&SetChannel{
+		Id:                       lightning.Scid(scid).ClnStyle(),
+		HtlcMaximumMilliSatoshis: fmt.Sprint(maxHtlcMsat),
+	}, &res)
+	if err != nil {
+		return 0, err
+	}
+	return maxHtlcMsat, err
+}
diff --git a/testframework/lightning.go b/testframework/lightning.go
index 1ab15e52..444fd4ce 100644
--- a/testframework/lightning.go
+++ b/testframework/lightning.go
@@ -33,5 +33,6 @@ type LightningNode interface {
 	GetFeeInvoiceAmtSat() (sat uint64, err error)
 
 	Run(waitForReady, swaitForBitcoinSynced bool) error
+	SetHtlcMaximumMilliSatoshis(scid string, maxHtlcMsat uint64) (msat uint64, err error)
 	Stop() error
 }
diff --git a/testframework/lnd.go b/testframework/lnd.go
index 7be94494..d87ad0bb 100644
--- a/testframework/lnd.go
+++ b/testframework/lnd.go
@@ -9,7 +9,10 @@ import (
 	"os"
 	"path/filepath"
 	"regexp"
+	"strconv"
+	"strings"
 
+	"github.com/elementsproject/peerswap/lightning"
 	"github.com/lightningnetwork/lnd/lnrpc"
 	"github.com/lightningnetwork/lnd/lnwire"
 )
@@ -529,3 +532,50 @@ func (n *LndNode) GetFeeInvoiceAmtSat() (sat uint64, err error) {
 	}
 	return feeInvoiceAmt, nil
 }
+
+func (n *LndNode) SetHtlcMaximumMilliSatoshis(scid string, maxHtlcMsat uint64) (msat uint64, err error) {
+	s := lightning.Scid(scid)
+	res, err := n.Rpc.ListChannels(context.Background(), &lnrpc.ListChannelsRequest{})
+	if err != nil {
+		return 0, fmt.Errorf("ListChannels() %w", err)
+	}
+	for _, ch := range res.GetChannels() {
+		channelShortId := lnwire.NewShortChanIDFromInt(ch.ChanId)
+		if channelShortId.String() == s.LndStyle() {
+			r, err := n.Rpc.GetChanInfo(context.Background(), &lnrpc.ChanInfoRequest{
+				ChanId: ch.ChanId,
+			})
+			if err != nil {
+				return 0, err
+			}
+			parts := strings.Split(r.ChanPoint, ":")
+			if len(parts) != 2 {
+				return 0, fmt.Errorf("expected scid to be composed of 3 blocks")
+			}
+			txPosition, err := strconv.Atoi(parts[1])
+			if err != nil {
+				return 0, err
+			}
+			_, err = n.Rpc.UpdateChannelPolicy(context.Background(), &lnrpc.PolicyUpdateRequest{
+				Scope: &lnrpc.PolicyUpdateRequest_ChanPoint{ChanPoint: &lnrpc.ChannelPoint{
+					FundingTxid: &lnrpc.ChannelPoint_FundingTxidStr{
+						FundingTxidStr: parts[0],
+					},
+					OutputIndex: uint32(txPosition),
+				}},
+				BaseFeeMsat:          1000,
+				FeeRate:              1,
+				FeeRatePpm:           0,
+				TimeLockDelta:        40,
+				MaxHtlcMsat:          maxHtlcMsat,
+				MinHtlcMsat:          msat,
+				MinHtlcMsatSpecified: false,
+			})
+			if err != nil {
+				return 0, err
+			}
+			return maxHtlcMsat, err
+		}
+	}
+	return 0, fmt.Errorf("could not find a channel with scid: %s", scid)
+}