diff --git a/electrum/lnsweep.py b/electrum/lnsweep.py
index cbd3230184f5..84b542411ce8 100644
--- a/electrum/lnsweep.py
+++ b/electrum/lnsweep.py
@@ -5,7 +5,7 @@
 from typing import Optional, Dict, List, Tuple, TYPE_CHECKING, NamedTuple, Callable
 from enum import Enum, auto
 
-from .util import bfh, bh2u
+from .util import bfh, bh2u, UneconomicFee
 from .bitcoin import redeem_script_to_address, dust_threshold, construct_witness
 from . import coinchooser
 from . import ecc
@@ -28,6 +28,9 @@
 
 _logger = get_logger(__name__)
 
+HTLC_TRANSACTION_DEADLINE_FRACTION = 4
+HTLC_TRANSACTION_SWEEP_TARGET = 10
+
 
 class SweepInfo(NamedTuple):
     name: str
@@ -301,11 +304,14 @@ def create_txns_for_htlc(
         subject=LOCAL,
         ctn=ctn)
     for (direction, htlc), (ctx_output_idx, htlc_relative_idx) in htlc_to_ctx_output_idx_map.items():
-        create_txns_for_htlc(
-            htlc=htlc,
-            htlc_direction=direction,
-            ctx_output_idx=ctx_output_idx,
-            htlc_relative_idx=htlc_relative_idx)
+        try:
+            create_txns_for_htlc(
+                htlc=htlc,
+                htlc_direction=direction,
+                ctx_output_idx=ctx_output_idx,
+                htlc_relative_idx=htlc_relative_idx)
+        except UneconomicFee:
+            continue
     return txs
 
 
@@ -566,9 +572,28 @@ def create_htlctx_that_spends_from_our_ctx(
     if chan.has_anchors():
         wallet = chan.lnworker.wallet
         coins = wallet.get_spendable_coins(None)
+
         def fee_estimator(size):
-            # TODO: set reasonable fee
-            return wallet.config.estimate_fee_for_feerate(fee_per_kb=10*1000, size=size)
+            if htlc_direction == SENT:
+                # we deal with an offered HTLC and therefore with a timeout transaction
+                # in this case it is not time critical for us to sweep unless we
+                # become a forwarding node
+                fee_per_kb = wallet.config.eta_target_to_fee(HTLC_TRANSACTION_SWEEP_TARGET)
+            else:
+                # in the case of a received HTLC, if we have the hash preimage,
+                # we should sweep before the timelock expires
+                expiry_height = htlc.cltv_expiry
+                current_height = wallet.network.blockchain().height()
+                deadline_blocks = expiry_height - current_height
+                # target block inclusion with a safety buffer
+                target = int(deadline_blocks / HTLC_TRANSACTION_DEADLINE_FRACTION)
+                fee_per_kb = wallet.config.eta_target_to_fee(target)
+            fee = wallet.config.estimate_fee_for_feerate(fee_per_kb=fee_per_kb, size=size)
+            # we only sweep if it is makes sense economically
+            if fee > htlc.amount_msat // 1000:
+                raise UneconomicFee
+            return fee
+
         coin_chooser = coinchooser.get_coin_chooser(wallet.config)
         change_address = wallet.get_single_change_address_for_new_transaction()
         funded_htlc_tx = coin_chooser.make_tx(
diff --git a/electrum/util.py b/electrum/util.py
index 9a40d4fe40d2..bb41dcd0f747 100644
--- a/electrum/util.py
+++ b/electrum/util.py
@@ -139,6 +139,11 @@ def __str__(self):
         return _("Insufficient funds")
 
 
+class UneconomicFee(Exception):
+    def __str__(self):
+        return _("The fee for the transaction is higher than the funds gained from it.")
+
+
 class NoDynamicFeeEstimates(Exception):
     def __str__(self):
         return _('Dynamic fee estimates not available')