diff --git a/discovery/gossiper.go b/discovery/gossiper.go
index eaaba6b95..02791bccd 100644
--- a/discovery/gossiper.go
+++ b/discovery/gossiper.go
@@ -1097,8 +1097,9 @@ func (d *AuthenticatedGossiper) retransmitStaleChannels() error {
 	for _, chanToUpdate := range edgesToUpdate {
 		// Re-sign and update the channel on disk and retrieve our
 		// ChannelUpdate to broadcast.
-		chanAnn, chanUpdate, err := d.updateChannel(chanToUpdate.info,
-			chanToUpdate.edge)
+		chanAnn, chanUpdate, err := d.updateChannel(
+			chanToUpdate.info, chanToUpdate.edge,
+		)
 		if err != nil {
 			return fmt.Errorf("unable to update channel: %v", err)
 		}
@@ -1131,8 +1132,8 @@ func (d *AuthenticatedGossiper) retransmitStaleChannels() error {
 
 // processChanPolicyUpdate generates a new set of channel updates with the new
 // channel policy applied for each specified channel identified by its channel
-// point. In the case that no channel points are specified, then the update will
-// be applied to all channels. Finally, the backing ChannelGraphSource is
+// point. In the case that no channel points are specified, then the update
+// will be applied to all channels. Finally, the backing ChannelGraphSource is
 // updated with the latest information reflecting the applied updates.
 //
 // TODO(roasbeef): generalize into generic for any channel update
@@ -1146,13 +1147,24 @@ func (d *AuthenticatedGossiper) processChanPolicyUpdate(
 	}
 
 	haveChanFilter := len(chansToUpdate) != 0
+	if haveChanFilter {
+		log.Infof("Updating routing policies for chan_points=%v",
+			spew.Sdump(chansToUpdate))
+	} else {
+		log.Infof("Updating routing policies for all chans")
+	}
 
-	var chanUpdates []networkMsg
+	type edgeWithInfo struct {
+		info *channeldb.ChannelEdgeInfo
+		edge *channeldb.ChannelEdgePolicy
+	}
+	var edgesToUpdate []edgeWithInfo
 
 	// Next, we'll loop over all the outgoing channels the router knows of.
 	// If we have a filter then we'll only collected those channels,
 	// otherwise we'll collect them all.
-	err := d.cfg.Router.ForAllOutgoingChannels(func(info *channeldb.ChannelEdgeInfo,
+	err := d.cfg.Router.ForAllOutgoingChannels(func(
+		info *channeldb.ChannelEdgeInfo,
 		edge *channeldb.ChannelEdgePolicy) error {
 
 		// If we have a channel filter, and this channel isn't a part
@@ -1161,20 +1173,37 @@ func (d *AuthenticatedGossiper) processChanPolicyUpdate(
 			return nil
 		}
 
-		// Apply the new fee schema to the edge.
+		// Now that we know we should update this channel, we'll update
+		// its set of policies.
 		edge.FeeBaseMSat = policyUpdate.newSchema.BaseFee
 		edge.FeeProportionalMillionths = lnwire.MilliSatoshi(
 			policyUpdate.newSchema.FeeRate,
 		)
-
-		// Apply the new TimeLockDelta.
 		edge.TimeLockDelta = uint16(policyUpdate.newSchema.TimeLockDelta)
 
-		// Re-sign and update the backing ChannelGraphSource, and
+		edgesToUpdate = append(edgesToUpdate, edgeWithInfo{
+			info: info,
+			edge: edge,
+		})
+
+		return nil
+	})
+	if err != nil {
+		return nil, err
+	}
+
+	// With the set of edges we need to update retrieved, we'll now re-sign
+	// them, and insert them into the database.
+	var chanUpdates []networkMsg
+	for _, edgeInfo := range edgesToUpdate {
+		// Now that we've collected all the channels we need to update,
+		// we'll Re-sign and update the backing ChannelGraphSource, and
 		// retrieve our ChannelUpdate to broadcast.
-		_, chanUpdate, err := d.updateChannel(info, edge)
+		_, chanUpdate, err := d.updateChannel(
+			edgeInfo.info, edgeInfo.edge,
+		)
 		if err != nil {
-			return err
+			return nil, err
 		}
 
 		// We set ourselves as the source of this message to indicate
@@ -1183,11 +1212,6 @@ func (d *AuthenticatedGossiper) processChanPolicyUpdate(
 			peer: d.selfKey,
 			msg:  chanUpdate,
 		})
-
-		return nil
-	})
-	if err != nil {
-		return nil, err
 	}
 
 	return chanUpdates, nil
@@ -2127,8 +2151,8 @@ func (d *AuthenticatedGossiper) updateChannel(info *channeldb.ChannelEdgeInfo,
 
 	var err error
 
-	// Make sure timestamp is always increased, such that our update
-	// gets propagated.
+	// Make sure timestamp is always increased, such that our update gets
+	// propagated.
 	timestamp := time.Now().Unix()
 	if timestamp <= edge.LastUpdate.Unix() {
 		timestamp = edge.LastUpdate.Unix() + 1
diff --git a/htlcswitch/interfaces.go b/htlcswitch/interfaces.go
index 36852d36c..6961050ac 100644
--- a/htlcswitch/interfaces.go
+++ b/htlcswitch/interfaces.go
@@ -76,6 +76,14 @@ type ChannelLink interface {
 	// policy to govern if it an incoming HTLC should be forwarded or not.
 	UpdateForwardingPolicy(ForwardingPolicy)
 
+	// HtlcSatifiesPolicy should return a nil error if the passed HTLC
+	// details satisfy the current forwarding policy fo the target link.
+	// Otherwise, a valid protocol failure message should be returned in
+	// order to signal to the source of the HTLC, the policy consistency
+	// issue.
+	HtlcSatifiesPolicy(payHash [32]byte,
+		incomingAmt, amtToForward lnwire.MilliSatoshi) lnwire.FailureMessage
+
 	// Bandwidth returns the amount of milli-satoshis which current link
 	// might pass through channel link. The value returned from this method
 	// represents the up to date available flow through the channel. This
diff --git a/htlcswitch/link.go b/htlcswitch/link.go
index 2a7feae23..d8eecac26 100644
--- a/htlcswitch/link.go
+++ b/htlcswitch/link.go
@@ -79,7 +79,8 @@ type ForwardingPolicy struct {
 //
 // TODO(roasbeef): also add in current available channel bandwidth, inverse
 // func
-func ExpectedFee(f ForwardingPolicy, htlcAmt lnwire.MilliSatoshi) lnwire.MilliSatoshi {
+func ExpectedFee(f ForwardingPolicy,
+	htlcAmt lnwire.MilliSatoshi) lnwire.MilliSatoshi {
 
 	// TODO(roasbeef): write some basic table driven tests
 	return f.BaseFee + (htlcAmt*f.FeeRate)/1000000
@@ -151,10 +152,12 @@ type ChannelLinkConfig struct {
 	// Sphinx onion blob, and creating onion failure obfuscator.
 	ExtractErrorEncrypter ErrorEncrypterExtracter
 
-	// GetLastChannelUpdate retrieves the latest routing policy for this
-	// particular channel. This will be used to provide payment senders our
-	// latest policy when sending encrypted error messages.
-	GetLastChannelUpdate func() (*lnwire.ChannelUpdate, error)
+	// FetchLastChannelUpdate retrieves the latest routing policy for a
+	// target channel. This channel will typically be the outgoing channel
+	// specified when we receive an incoming HTLC.  This will be used to
+	// provide payment senders our latest policy when sending encrypted
+	// error messages.
+	FetchLastChannelUpdate func(lnwire.ShortChannelID) (*lnwire.ChannelUpdate, error)
 
 	// Peer is a lightning network node with which we have the channel link
 	// opened.
@@ -310,11 +313,6 @@ type channelLink struct {
 	// by the HTLC switch.
 	downstream chan *htlcPacket
 
-	// linkControl is a channel which is used to query the state of the
-	// link, or update various policies used which govern if an HTLC is to
-	// be forwarded and/or accepted.
-	linkControl chan interface{}
-
 	// htlcUpdates is a channel that we'll use to update outside
 	// sub-systems with the latest set of active HTLC's on our channel.
 	htlcUpdates chan []channeldb.HTLC
@@ -342,7 +340,6 @@ func NewChannelLink(cfg ChannelLinkConfig, channel *lnwallet.LightningChannel,
 		cfg:         cfg,
 		channel:     channel,
 		shortChanID: channel.ShortChanID(),
-		linkControl: make(chan interface{}),
 		// TODO(roasbeef): just do reserve here?
 		logCommitTimer: time.NewTimer(300 * time.Millisecond),
 		overflowQueue:  newPacketQueue(lnwallet.MaxHTLCNumber / 2),
@@ -920,30 +917,6 @@ out:
 		case msg := <-l.upstream:
 			l.handleUpstreamMsg(msg)
 
-		// TODO(roasbeef): make distinct goroutine to handle?
-		case cmd := <-l.linkControl:
-
-			switch req := cmd.(type) {
-			case *policyUpdate:
-				// In order to avoid overriding a valid policy
-				// with a "null" field in the new policy, we'll
-				// only update to the set sub policy if the new
-				// value isn't uninitialized.
-				if req.policy.BaseFee != 0 {
-					l.cfg.FwrdingPolicy.BaseFee = req.policy.BaseFee
-				}
-				if req.policy.FeeRate != 0 {
-					l.cfg.FwrdingPolicy.FeeRate = req.policy.FeeRate
-				}
-				if req.policy.TimeLockDelta != 0 {
-					l.cfg.FwrdingPolicy.TimeLockDelta = req.policy.TimeLockDelta
-				}
-
-				if req.done != nil {
-					close(req.done)
-				}
-			}
-
 		case <-l.quit:
 			break out
 		}
@@ -1502,6 +1475,9 @@ func (l *channelLink) Peer() Peer {
 //
 // NOTE: Part of the ChannelLink interface.
 func (l *channelLink) ShortChanID() lnwire.ShortChannelID {
+	l.RLock()
+	defer l.RUnlock()
+
 	return l.shortChanID
 }
 
@@ -1581,14 +1557,6 @@ func (l *channelLink) AttachMailBox(mailbox MailBox) {
 	l.Unlock()
 }
 
-// policyUpdate is a message sent to a channel link when an outside sub-system
-// wishes to update the current forwarding policy.
-type policyUpdate struct {
-	policy ForwardingPolicy
-
-	done chan struct{}
-}
-
 // UpdateForwardingPolicy updates the forwarding policy for the target
 // ChannelLink. Once updated, the link will use the new forwarding policy to
 // govern if it an incoming HTLC should be forwarded or not. Note that this
@@ -1598,20 +1566,98 @@ type policyUpdate struct {
 //
 // NOTE: Part of the ChannelLink interface.
 func (l *channelLink) UpdateForwardingPolicy(newPolicy ForwardingPolicy) {
-	cmd := &policyUpdate{
-		policy: newPolicy,
-		done:   make(chan struct{}),
+	l.Lock()
+	defer l.Unlock()
+
+	// In order to avoid overriding a valid policy with a "null" field in
+	// the new policy, we'll only update to the set sub policy if the new
+	// value isn't uninitialized.
+	if newPolicy.BaseFee != 0 {
+		l.cfg.FwrdingPolicy.BaseFee = newPolicy.BaseFee
+	}
+	if newPolicy.FeeRate != 0 {
+		l.cfg.FwrdingPolicy.FeeRate = newPolicy.FeeRate
+	}
+	if newPolicy.TimeLockDelta != 0 {
+		l.cfg.FwrdingPolicy.TimeLockDelta = newPolicy.TimeLockDelta
+	}
+	if newPolicy.MinHTLC != 0 {
+		l.cfg.FwrdingPolicy.MinHTLC = newPolicy.MinHTLC
+	}
+}
+
+// HtlcSatifiesPolicy should return a nil error if the passed HTLC details
+// satisfy the current forwarding policy fo the target link.  Otherwise, a
+// valid protocol failure message should be returned in order to signal to the
+// source of the HTLC, the policy consistency issue.
+//
+// NOTE: Part of the ChannelLink interface.
+func (l *channelLink) HtlcSatifiesPolicy(payHash [32]byte,
+	incomingHtlcAmt, amtToForward lnwire.MilliSatoshi) lnwire.FailureMessage {
+
+	l.RLock()
+	defer l.RUnlock()
+
+	// As our first sanity check, we'll ensure that the passed HTLC isn't
+	// too small for the next hop. If so, then we'll cancel the HTLC
+	// directly.
+	if amtToForward < l.cfg.FwrdingPolicy.MinHTLC {
+		l.errorf("outgoing htlc(%x) is too small: min_htlc=%v, "+
+			"htlc_value=%v", payHash[:], l.cfg.FwrdingPolicy.MinHTLC,
+			amtToForward)
+
+		// As part of the returned error, we'll send our latest routing
+		// policy so the sending node obtains the most up to date data.
+		var failure lnwire.FailureMessage
+		update, err := l.cfg.FetchLastChannelUpdate(
+			l.shortChanID,
+		)
+		if err != nil {
+			failure = lnwire.NewTemporaryChannelFailure(nil)
+		} else {
+			failure = lnwire.NewAmountBelowMinimum(
+				amtToForward, *update,
+			)
+		}
+
+		return failure
 	}
 
-	select {
-	case l.linkControl <- cmd:
-	case <-l.quit:
+	// Next, using the amount of the incoming HTLC, we'll calculate the
+	// expected fee this incoming HTLC must carry in order to satisfy the
+	// constraints of the outgoing link.
+	expectedFee := ExpectedFee(l.cfg.FwrdingPolicy, amtToForward)
+
+	// If the actual fee is less than our expected fee, then we'll reject
+	// this HTLC as it didn't provide a sufficient amount of fees, or the
+	// values have been tampered with, or the send used incorrect/dated
+	// information to construct the forwarding information for this hop. In
+	// any case, we'll cancel this HTLC.
+	actualFee := incomingHtlcAmt - amtToForward
+	if incomingHtlcAmt < amtToForward || actualFee < expectedFee {
+		l.errorf("outgoing htlc(%x) has insufficient "+
+			"fee: expected %v, got %v", payHash[:],
+			int64(expectedFee),
+			int64(actualFee))
+
+		// As part of the returned error, we'll send our latest routing
+		// policy so the sending node obtains the most up to date data.
+		var failure lnwire.FailureMessage
+		update, err := l.cfg.FetchLastChannelUpdate(
+			l.shortChanID,
+		)
+		if err != nil {
+			failure = lnwire.NewTemporaryChannelFailure(nil)
+		} else {
+			failure = lnwire.NewFeeInsufficient(
+				amtToForward, *update,
+			)
+		}
+
+		return failure
 	}
 
-	select {
-	case <-cmd.done:
-	case <-l.quit:
-	}
+	return nil
 }
 
 // Stats returns the statistics of channel link.
@@ -2101,17 +2147,22 @@ func (l *channelLink) processRemoteAdds(fwdPkg *channeldb.FwdPkg,
 					htlc:           addMsg,
 					obfuscator:     obfuscator,
 				}
-				switchPackets = append(switchPackets,
-					updatePacket)
+				switchPackets = append(
+					switchPackets, updatePacket,
+				)
 
 				continue
 			}
 
+			// We'll consult the forwarding policy for this link
+			// when checking time locked related constraints.
+			hopPolicy := l.cfg.FwrdingPolicy
+
 			// We want to avoid forwarding an HTLC which will
 			// expire in the near future, so we'll reject an HTLC
 			// if its expiration time is too close to the current
 			// height.
-			timeDelta := l.cfg.FwrdingPolicy.TimeLockDelta
+			timeDelta := hopPolicy.TimeLockDelta
 			if pd.Timeout-timeDelta <= heightNow {
 				log.Errorf("htlc(%x) has an expiry "+
 					"that's too soon: outgoing_expiry=%v, "+
@@ -2119,7 +2170,9 @@ func (l *channelLink) processRemoteAdds(fwdPkg *channeldb.FwdPkg,
 					pd.Timeout-timeDelta, heightNow)
 
 				var failure lnwire.FailureMessage
-				update, err := l.cfg.GetLastChannelUpdate()
+				update, err := l.cfg.FetchLastChannelUpdate(
+					l.shortChanID,
+				)
 				if err != nil {
 					failure = lnwire.NewTemporaryChannelFailure(nil)
 				} else {
@@ -2127,78 +2180,8 @@ func (l *channelLink) processRemoteAdds(fwdPkg *channeldb.FwdPkg,
 				}
 
 				l.sendHTLCError(
-					pd.HtlcIndex, failure, obfuscator, pd.SourceRef,
-				)
-				needUpdate = true
-				continue
-			}
-
-			// As our second sanity check, we'll ensure that the
-			// passed HTLC isn't too small. If so, then
-			// we'll cancel the HTLC directly.
-			if pd.Amount < l.cfg.FwrdingPolicy.MinHTLC {
-				log.Errorf("Incoming htlc(%x) is too "+
-					"small: min_htlc=%v, htlc_value=%v",
-					pd.RHash[:], l.cfg.FwrdingPolicy.MinHTLC,
-					pd.Amount)
-
-				// As part of the returned error, we'll send
-				// our latest routing policy so the sending
-				// node obtains the most up to date data.
-				var failure lnwire.FailureMessage
-				update, err := l.cfg.GetLastChannelUpdate()
-				if err != nil {
-					failure = lnwire.NewTemporaryChannelFailure(nil)
-				} else {
-					failure = lnwire.NewAmountBelowMinimum(
-						pd.Amount, *update)
-				}
-
-				l.sendHTLCError(
-					pd.HtlcIndex, failure, obfuscator, pd.SourceRef,
-				)
-				needUpdate = true
-				continue
-			}
-
-			// Next, using the amount of the incoming HTLC, we'll
-			// calculate the expected fee this incoming HTLC must
-			// carry in order to be accepted.
-			expectedFee := ExpectedFee(
-				l.cfg.FwrdingPolicy,
-				fwdInfo.AmountToForward,
-			)
-
-			// If the actual fee is less than our expected
-			// fee, then we'll reject this HTLC as it didn't
-			// provide a sufficient amount of fees, or the values
-			// have been tampered with, or the send used
-			// incorrect/dated information to construct the
-			// forwarding information for this hop. In any case,
-			// we'll cancel this HTLC.
-			actualFee := pd.Amount - fwdInfo.AmountToForward
-			if pd.Amount < fwdInfo.AmountToForward ||
-				actualFee < expectedFee {
-
-				log.Errorf("Incoming htlc(%x) has insufficient "+
-					"fee: expected %v, got %v", pd.RHash[:],
-					int64(expectedFee),
-					int64(pd.Amount-fwdInfo.AmountToForward))
-
-				// As part of the returned error, we'll send
-				// our latest routing policy so the sending
-				// node obtains the most up to date data.
-				var failure lnwire.FailureMessage
-				update, err := l.cfg.GetLastChannelUpdate()
-				if err != nil {
-					failure = lnwire.NewTemporaryChannelFailure(nil)
-				} else {
-					failure = lnwire.NewFeeInsufficient(pd.Amount,
-						*update)
-				}
-
-				l.sendHTLCError(
-					pd.HtlcIndex, failure, obfuscator, pd.SourceRef,
+					pd.HtlcIndex, failure, obfuscator,
+					pd.SourceRef,
 				)
 				needUpdate = true
 				continue
@@ -2220,7 +2203,9 @@ func (l *channelLink) processRemoteAdds(fwdPkg *channeldb.FwdPkg,
 				// Grab the latest routing policy so the
 				// sending node is up to date with our current
 				// policy.
-				update, err := l.cfg.GetLastChannelUpdate()
+				update, err := l.cfg.FetchLastChannelUpdate(
+					l.shortChanID,
+				)
 				if err != nil {
 					l.fail("unable to create channel update "+
 						"while handling the error: %v", err)
diff --git a/htlcswitch/link_test.go b/htlcswitch/link_test.go
index 95f11d0f5..699773ed3 100644
--- a/htlcswitch/link_test.go
+++ b/htlcswitch/link_test.go
@@ -826,7 +826,7 @@ func TestUpdateForwardingPolicy(t *testing.T) {
 	// update logic
 	newPolicy := n.globalPolicy
 	newPolicy.BaseFee = lnwire.NewMSatFromSatoshis(1000)
-	n.firstBobChannelLink.UpdateForwardingPolicy(newPolicy)
+	n.secondBobChannelLink.UpdateForwardingPolicy(newPolicy)
 
 	// Next, we'll send the payment again, using the exact same per-hop
 	// payload for each node. This payment should fail as it won't factor
@@ -1476,8 +1476,8 @@ func newSingleLinkTestHarness(chanAmt, chanReserve btcutil.Amount) (
 			ErrorEncrypter, lnwire.FailCode) {
 			return obfuscator, lnwire.CodeNone
 		},
-		GetLastChannelUpdate: mockGetChanUpdateMessage,
-		PreimageCache:        pCache,
+		FetchLastChannelUpdate: mockGetChanUpdateMessage,
+		PreimageCache:          pCache,
 		UpdateContractSignals: func(*contractcourt.ContractSignals) error {
 			return nil
 		},
diff --git a/htlcswitch/mock.go b/htlcswitch/mock.go
index 42c1843c7..33898293c 100644
--- a/htlcswitch/mock.go
+++ b/htlcswitch/mock.go
@@ -604,6 +604,10 @@ func (f *mockChannelLink) HandleChannelUpdate(lnwire.Message) {
 
 func (f *mockChannelLink) UpdateForwardingPolicy(_ ForwardingPolicy) {
 }
+func (f *mockChannelLink) HtlcSatifiesPolicy([32]byte, lnwire.MilliSatoshi,
+	lnwire.MilliSatoshi) lnwire.FailureMessage {
+	return nil
+}
 
 func (f *mockChannelLink) Stats() (uint64, lnwire.MilliSatoshi, lnwire.MilliSatoshi) {
 	return 0, 0, 0
diff --git a/htlcswitch/switch.go b/htlcswitch/switch.go
index 0fc30c831..e530c73e6 100644
--- a/htlcswitch/switch.go
+++ b/htlcswitch/switch.go
@@ -168,10 +168,6 @@ type Switch struct {
 	// forward the settle/fail htlc updates back to the add htlc initiator.
 	circuits CircuitMap
 
-	// links is a map of channel id and channel link which manages
-	// this channel.
-	linkIndex map[lnwire.ChannelID]ChannelLink
-
 	// mailMtx is a read/write mutex that protects the mailboxes map.
 	mailMtx sync.RWMutex
 
@@ -179,6 +175,14 @@ type Switch struct {
 	// switch to buffer messages for peers that have not come back online.
 	mailboxes map[lnwire.ShortChannelID]MailBox
 
+	// indexMtx is a read/write mutex that protects the set of indexes
+	// below.
+	indexMtx sync.RWMutex
+
+	// links is a map of channel id and channel link which manages
+	// this channel.
+	linkIndex map[lnwire.ChannelID]ChannelLink
+
 	// forwardingIndex is an index which is consulted by the switch when it
 	// needs to locate the next hop to forward an incoming/outgoing HTLC
 	// update to/from.
@@ -244,7 +248,6 @@ func New(cfg Config) (*Switch, error) {
 		htlcPlex:          make(chan *plexPacket),
 		chanCloseRequests: make(chan *ChanClose),
 		resolutionMsgs:    make(chan *resolutionMsg),
-		linkControl:       make(chan interface{}),
 		quit:              make(chan struct{}),
 	}, nil
 }
@@ -386,63 +389,47 @@ func (s *Switch) SendHTLC(nextNode [33]byte, htlc *lnwire.UpdateAddHTLC,
 func (s *Switch) UpdateForwardingPolicies(newPolicy ForwardingPolicy,
 	targetChans ...wire.OutPoint) error {
 
-	errChan := make(chan error, 1)
-	select {
-	case s.linkControl <- &updatePoliciesCmd{
-		newPolicy:   newPolicy,
-		targetChans: targetChans,
-		err:         errChan,
-	}:
-	case <-s.quit:
-		return fmt.Errorf("switch is shutting down")
-	}
+	log.Debugf("Updating link policies: %v", newLogClosure(func() string {
+		return spew.Sdump(newPolicy)
+	}))
 
-	select {
-	case err := <-errChan:
-		return err
-	case <-s.quit:
-		return fmt.Errorf("switch is shutting down")
-	}
-}
+	var linksToUpdate []ChannelLink
 
-// updatePoliciesCmd is a message sent to the switch to update the forwarding
-// policies of a set of target links.
-type updatePoliciesCmd struct {
-	newPolicy   ForwardingPolicy
-	targetChans []wire.OutPoint
+	s.indexMtx.RLock()
 
-	err chan error
-}
-
-// updateLinkPolicies attempts to update the forwarding policies for the set of
-// passed links identified by their channel points. If a nil set of channel
-// points is passed, then the forwarding policies for all active links will be
-// updated.
-func (s *Switch) updateLinkPolicies(c *updatePoliciesCmd) error {
-	log.Debugf("Updating link policies: %v", spew.Sdump(c))
-
-	// If no channels have been targeted, then we'll update the link policies
-	// for all active channels
-	if len(c.targetChans) == 0 {
+	// If no channels have been targeted, then we'll collect all inks to
+	// update their policies.
+	if len(targetChans) == 0 {
 		for _, link := range s.linkIndex {
-			link.UpdateForwardingPolicy(c.newPolicy)
+			linksToUpdate = append(linksToUpdate, link)
+		}
+	} else {
+		// Otherwise, we'll only attempt to update the forwarding
+		// policies for the set of targeted links.
+		for _, targetLink := range targetChans {
+			cid := lnwire.NewChanIDFromOutPoint(&targetLink)
+
+			// If we can't locate a link by its converted channel
+			// ID, then we'll return an error back to the caller.
+			link, ok := s.linkIndex[cid]
+			if !ok {
+				s.indexMtx.RUnlock()
+
+				return fmt.Errorf("unable to find "+
+					"ChannelPoint(%v) to update link "+
+					"policy", targetLink)
+			}
+
+			linksToUpdate = append(linksToUpdate, link)
 		}
 	}
 
-	// Otherwise, we'll only attempt to update the forwarding policies for the
-	// set of targeted links.
-	for _, targetLink := range c.targetChans {
-		cid := lnwire.NewChanIDFromOutPoint(&targetLink)
+	s.indexMtx.RUnlock()
 
-		// If we can't locate a link by its converted channel ID, then we'll
-		// return an error back to the caller.
-		link, ok := s.linkIndex[cid]
-		if !ok {
-			return fmt.Errorf("unable to find ChannelPoint(%v) to "+
-				"update link policy", targetLink)
-		}
-
-		link.UpdateForwardingPolicy(c.newPolicy)
+	// With all the links we need to update collected, we can release the
+	// mutex then update each link directly.
+	for _, link := range linksToUpdate {
+		link.UpdateForwardingPolicy(newPolicy)
 	}
 
 	return nil
@@ -715,14 +702,18 @@ func (s *Switch) handleLocalDispatch(pkt *htlcPacket) error {
 	// appropriate channel link and send the payment over this link.
 	case *lnwire.UpdateAddHTLC:
 		// Try to find links by node destination.
+		s.indexMtx.RLock()
 		links, err := s.getLinks(pkt.destNode)
 		if err != nil {
+			s.indexMtx.RUnlock()
+
 			log.Errorf("unable to find links by destination %v", err)
 			return &ForwardingError{
 				ErrorSource:    s.cfg.SelfKey,
 				FailureMessage: &lnwire.FailUnknownNextPeer{},
 			}
 		}
+		s.indexMtx.RUnlock()
 
 		// Try to find destination channel link with appropriate
 		// bandwidth.
@@ -880,8 +871,11 @@ func (s *Switch) handlePacketForward(packet *htlcPacket) error {
 			return s.handleLocalDispatch(packet)
 		}
 
+		s.indexMtx.RLock()
 		targetLink, err := s.getLinkByShortID(packet.outgoingChanID)
 		if err != nil {
+			s.indexMtx.RUnlock()
+
 			// If packet was forwarded from another channel link
 			// than we should notify this link that some error
 			// occurred.
@@ -892,6 +886,13 @@ func (s *Switch) handlePacketForward(packet *htlcPacket) error {
 			return s.failAddPacket(packet, failure, addErr)
 		}
 		interfaceLinks, _ := s.getLinks(targetLink.Peer().PubKey())
+		s.indexMtx.RUnlock()
+
+		// We'll keep track of any HTLC failures during the link
+		// selection process. This way we can return the error for
+		// precise link that the sender selected, while optimistically
+		// trying all links to utilize our available bandwidth.
+		linkErrs := make(map[lnwire.ShortChannelID]lnwire.FailureMessage)
 
 		// Try to find destination channel link with appropriate
 		// bandwidth.
@@ -899,7 +900,25 @@ func (s *Switch) handlePacketForward(packet *htlcPacket) error {
 		for _, link := range interfaceLinks {
 			// We'll skip any links that aren't yet eligible for
 			// forwarding.
-			if !link.EligibleToForward() {
+			switch {
+			case !link.EligibleToForward():
+				continue
+
+			// If the link doesn't yet have a source chan ID, then
+			// we'll skip it as well.
+			case link.ShortChanID() == sourceHop:
+				continue
+			}
+
+			// Before we check the link's bandwidth, we'll ensure
+			// that the HTLC satisfies the current forwarding
+			// policy of this target link.
+			err := link.HtlcSatifiesPolicy(
+				htlc.PaymentHash, packet.incomingAmount,
+				packet.amount,
+			)
+			if err != nil {
+				linkErrs[link.ShortChanID()] = err
 				continue
 			}
 
@@ -910,10 +929,12 @@ func (s *Switch) handlePacketForward(packet *htlcPacket) error {
 			}
 		}
 
+		switch {
 		// If the channel link we're attempting to forward the update
-		// over has insufficient capacity, then we'll cancel the htlc
-		// as the payment cannot succeed.
-		if destination == nil {
+		// over has insufficient capacity, and didn't violate any
+		// forwarding policies, then we'll cancel the htlc as the
+		// payment cannot succeed.
+		case destination == nil && len(linkErrs) == 0:
 			// If packet was forwarded from another channel link
 			// than we should notify this link that some error
 			// occurred.
@@ -923,6 +944,34 @@ func (s *Switch) handlePacketForward(packet *htlcPacket) error {
 				"%v", htlc.Amount)
 
 			return s.failAddPacket(packet, failure, addErr)
+
+		// If we had a forwarding failure due to the HTLC not
+		// satisfying the current policy, then we'll send back an
+		// error, but ensure we send back the error sourced at the
+		// *target* link.
+		case destination == nil && len(linkErrs) != 0:
+			// At this point, some or all of the links rejected the
+			// HTLC so we couldn't forward it. So we'll try to look
+			// up the error that came from the source.
+			linkErr, ok := linkErrs[packet.outgoingChanID]
+			if !ok {
+				// If we can't find the error of the source,
+				// then we'll return an unknown next peer,
+				// though this should never happen.
+				linkErr = &lnwire.FailUnknownNextPeer{}
+				log.Warnf("unable to find err source for "+
+					"outgoing_link=%v, errors=%v",
+					packet.outgoingChanID, newLogClosure(func() string {
+						return spew.Sdump(linkErrs)
+					}))
+			}
+
+			addErr := fmt.Errorf("incoming HTLC(%x) violated "+
+				"target outgoing link (id=%v) policy: %v",
+				htlc.PaymentHash[:], packet.outgoingChanID,
+				linkErr)
+
+			return s.failAddPacket(packet, linkErr, addErr)
 		}
 
 		// Send the packet to the destination channel link which
@@ -1246,12 +1295,14 @@ func (s *Switch) htlcForwarder() {
 
 	// Remove all links once we've been signalled for shutdown.
 	defer func() {
+		s.indexMtx.Lock()
 		for _, link := range s.linkIndex {
 			if err := s.removeLink(link.ChanID()); err != nil {
 				log.Errorf("unable to remove "+
 					"channel link on stop: %v", err)
 			}
 		}
+		s.indexMtx.Unlock()
 
 		// Before we exit fully, we'll attempt to flush out any
 		// forwarding events that may still be lingering since the last
@@ -1282,12 +1333,17 @@ func (s *Switch) htlcForwarder() {
 		// cooperatively closed (if possible).
 		case req := <-s.chanCloseRequests:
 			chanID := lnwire.NewChanIDFromOutPoint(req.ChanPoint)
+
+			s.indexMtx.RLock()
 			link, ok := s.linkIndex[chanID]
 			if !ok {
+				s.indexMtx.RUnlock()
+
 				req.Err <- errors.Errorf("no peer for channel with "+
 					"chan_id=%x", chanID[:])
 				continue
 			}
+			s.indexMtx.RUnlock()
 
 			peerPub := link.Peer().PubKey()
 			log.Debugf("Requesting local channel close: peer=%v, "+
@@ -1367,6 +1423,7 @@ func (s *Switch) htlcForwarder() {
 
 			// Next, we'll run through all the registered links and
 			// compute their up-to-date forwarding stats.
+			s.indexMtx.RLock()
 			for _, link := range s.linkIndex {
 				// TODO(roasbeef): when links first registered
 				// stats printed.
@@ -1375,6 +1432,7 @@ func (s *Switch) htlcForwarder() {
 				newSatSent += sent.ToSatoshis()
 				newSatRecv += recv.ToSatoshis()
 			}
+			s.indexMtx.RUnlock()
 
 			var (
 				diffNumUpdates uint64
@@ -1424,28 +1482,6 @@ func (s *Switch) htlcForwarder() {
 			totalSatSent += diffSatSent
 			totalSatRecv += diffSatRecv
 
-		case req := <-s.linkControl:
-			switch cmd := req.(type) {
-			case *updatePoliciesCmd:
-				cmd.err <- s.updateLinkPolicies(cmd)
-			case *addLinkCmd:
-				cmd.err <- s.addLink(cmd.link)
-			case *removeLinkCmd:
-				cmd.err <- s.removeLink(cmd.chanID)
-			case *getLinkCmd:
-				link, err := s.getLink(cmd.chanID)
-				cmd.done <- link
-				cmd.err <- err
-			case *getLinksCmd:
-				links, err := s.getLinks(cmd.peer)
-				cmd.done <- links
-				cmd.err <- err
-			case *updateForwardingIndexCmd:
-				cmd.err <- s.updateShortChanID(
-					cmd.chanID, cmd.shortChanID,
-				)
-			}
-
 		case <-s.quit:
 			return
 		}
@@ -1501,8 +1537,7 @@ func (s *Switch) reforwardResponses() error {
 
 // loadChannelFwdPkgs loads all forwarding packages owned by the `source` short
 // channel identifier.
-func (s *Switch) loadChannelFwdPkgs(
-	source lnwire.ShortChannelID) ([]*channeldb.FwdPkg, error) {
+func (s *Switch) loadChannelFwdPkgs(source lnwire.ShortChannelID) ([]*channeldb.FwdPkg, error) {
 
 	var fwdPkgs []*channeldb.FwdPkg
 	if err := s.cfg.DB.Update(func(tx *bolt.Tx) error {
@@ -1634,38 +1669,11 @@ func (s *Switch) Stop() error {
 	return nil
 }
 
-// addLinkCmd is a add link command wrapper, it is used to propagate handler
-// parameters and return handler error.
-type addLinkCmd struct {
-	link ChannelLink
-	err  chan error
-}
-
 // AddLink is used to initiate the handling of the add link command. The
 // request will be propagated and handled in the main goroutine.
 func (s *Switch) AddLink(link ChannelLink) error {
-	command := &addLinkCmd{
-		link: link,
-		err:  make(chan error, 1),
-	}
-
-	select {
-	case s.linkControl <- command:
-		select {
-		case err := <-command.err:
-			return err
-		case <-s.quit:
-		}
-	case <-s.quit:
-	}
-
-	return errors.New("unable to add link htlc switch was stopped")
-}
-
-// addLink is used to add the newly created channel link and start use it to
-// handle the channel updates.
-func (s *Switch) addLink(link ChannelLink) error {
-	// TODO(roasbeef): reject if link already tehre?
+	s.indexMtx.Lock()
+	defer s.indexMtx.Unlock()
 
 	// First we'll add the link to the linkIndex which lets us quickly look
 	// up a channel when we need to close or register it, and the
@@ -1727,47 +1735,12 @@ func (s *Switch) getOrCreateMailBox(chanID lnwire.ShortChannelID) MailBox {
 	return mailbox
 }
 
-// getLinkCmd is a get link command wrapper, it is used to propagate handler
-// parameters and return handler error.
-type getLinkCmd struct {
-	chanID lnwire.ChannelID
-	err    chan error
-	done   chan ChannelLink
-}
-
 // GetLink is used to initiate the handling of the get link command. The
 // request will be propagated/handled to/in the main goroutine.
 func (s *Switch) GetLink(chanID lnwire.ChannelID) (ChannelLink, error) {
-	command := &getLinkCmd{
-		chanID: chanID,
-		err:    make(chan error, 1),
-		done:   make(chan ChannelLink, 1),
-	}
+	s.indexMtx.RLock()
+	defer s.indexMtx.RUnlock()
 
-query:
-	select {
-	case s.linkControl <- command:
-
-		var link ChannelLink
-		select {
-		case link = <-command.done:
-		case <-s.quit:
-			break query
-		}
-
-		select {
-		case err := <-command.err:
-			return link, err
-		case <-s.quit:
-		}
-	case <-s.quit:
-	}
-
-	return nil, errors.New("unable to get link htlc switch was stopped")
-}
-
-// getLink attempts to return the link that has the specified channel ID.
-func (s *Switch) getLink(chanID lnwire.ChannelID) (ChannelLink, error) {
 	link, ok := s.linkIndex[chanID]
 	if !ok {
 		return nil, ErrChannelLinkNotFound
@@ -1778,6 +1751,8 @@ func (s *Switch) getLink(chanID lnwire.ChannelID) (ChannelLink, error) {
 
 // getLinkByShortID attempts to return the link which possesses the target
 // short channel ID.
+//
+// NOTE: This MUST be called with the indexMtx held.
 func (s *Switch) getLinkByShortID(chanID lnwire.ShortChannelID) (ChannelLink, error) {
 	link, ok := s.forwardingIndex[chanID]
 	if !ok {
@@ -1787,35 +1762,18 @@ func (s *Switch) getLinkByShortID(chanID lnwire.ShortChannelID) (ChannelLink, er
 	return link, nil
 }
 
-// removeLinkCmd is a get link command wrapper, it is used to propagate handler
-// parameters and return handler error.
-type removeLinkCmd struct {
-	chanID lnwire.ChannelID
-	err    chan error
-}
-
 // RemoveLink is used to initiate the handling of the remove link command. The
 // request will be propagated/handled to/in the main goroutine.
 func (s *Switch) RemoveLink(chanID lnwire.ChannelID) error {
-	command := &removeLinkCmd{
-		chanID: chanID,
-		err:    make(chan error, 1),
-	}
+	s.indexMtx.Lock()
+	defer s.indexMtx.Unlock()
 
-	select {
-	case s.linkControl <- command:
-		select {
-		case err := <-command.err:
-			return err
-		case <-s.quit:
-		}
-	case <-s.quit:
-	}
-
-	return errors.New("unable to remove link htlc switch was stopped")
+	return s.removeLink(chanID)
 }
 
 // removeLink is used to remove and stop the channel link.
+//
+// NOTE: This MUST be called with the indexMtx held.
 func (s *Switch) removeLink(chanID lnwire.ChannelID) error {
 	log.Infof("Removing channel link with ChannelID(%v)", chanID)
 
@@ -1837,50 +1795,21 @@ func (s *Switch) removeLink(chanID lnwire.ChannelID) error {
 	return nil
 }
 
-// updateForwardingIndexCmd is a command sent by outside sub-systems to update
-// the forwarding index of the switch in the event that the short channel ID of
-// a particular link changes.
-type updateForwardingIndexCmd struct {
-	chanID      lnwire.ChannelID
-	shortChanID lnwire.ShortChannelID
-
-	err chan error
-}
-
 // UpdateShortChanID updates the short chan ID for an existing channel. This is
 // required in the case of a re-org and re-confirmation or a channel, or in the
 // case that a link was added to the switch before its short chan ID was known.
 func (s *Switch) UpdateShortChanID(chanID lnwire.ChannelID,
 	shortChanID lnwire.ShortChannelID) error {
 
-	command := &updateForwardingIndexCmd{
-		chanID:      chanID,
-		shortChanID: shortChanID,
-		err:         make(chan error, 1),
-	}
-
-	select {
-	case s.linkControl <- command:
-		select {
-		case err := <-command.err:
-			return err
-		case <-s.quit:
-		}
-	case <-s.quit:
-	}
-
-	return errors.New("unable to update short chan id htlc switch was stopped")
-}
-
-// updateShortChanID updates the short chan ID of an existing link.
-func (s *Switch) updateShortChanID(chanID lnwire.ChannelID,
-	shortChanID lnwire.ShortChannelID) error {
+	s.indexMtx.Lock()
 
 	// First, we'll extract the current link as is from the link link
 	// index. If the link isn't even in the index, then we'll return an
 	// error.
 	link, ok := s.linkIndex[chanID]
 	if !ok {
+		s.indexMtx.Unlock()
+
 		return fmt.Errorf("link %v not found", chanID)
 	}
 
@@ -1891,53 +1820,27 @@ func (s *Switch) updateShortChanID(chanID lnwire.ChannelID,
 	// forwarding index with the next short channel ID.
 	s.forwardingIndex[shortChanID] = link
 
+	s.indexMtx.Unlock()
+
 	// Finally, we'll notify the link of its new short channel ID.
 	link.UpdateShortChanID(shortChanID)
 
 	return nil
 }
 
-// getLinksCmd is a get links command wrapper, it is used to propagate handler
-// parameters and return handler error.
-type getLinksCmd struct {
-	peer [33]byte
-	err  chan error
-	done chan []ChannelLink
-}
-
 // GetLinksByInterface fetches all the links connected to a particular node
 // identified by the serialized compressed form of its public key.
 func (s *Switch) GetLinksByInterface(hop [33]byte) ([]ChannelLink, error) {
-	command := &getLinksCmd{
-		peer: hop,
-		err:  make(chan error, 1),
-		done: make(chan []ChannelLink, 1),
-	}
+	s.indexMtx.RLock()
+	defer s.indexMtx.RUnlock()
 
-query:
-	select {
-	case s.linkControl <- command:
-
-		var links []ChannelLink
-		select {
-		case links = <-command.done:
-		case <-s.quit:
-			break query
-		}
-
-		select {
-		case err := <-command.err:
-			return links, err
-		case <-s.quit:
-		}
-	case <-s.quit:
-	}
-
-	return nil, errors.New("unable to get links htlc switch was stopped")
+	return s.getLinks(hop)
 }
 
 // getLinks is function which returns the channel links of the peer by hop
 // destination id.
+//
+// NOTE: This MUST be called with the indexMtx held.
 func (s *Switch) getLinks(destination [33]byte) ([]ChannelLink, error) {
 	links, ok := s.interfaceIndex[destination]
 	if !ok {
diff --git a/htlcswitch/test_utils.go b/htlcswitch/test_utils.go
index adb5c2d03..ec9ce9ad2 100644
--- a/htlcswitch/test_utils.go
+++ b/htlcswitch/test_utils.go
@@ -116,9 +116,9 @@ func genIDs() (lnwire.ChannelID, lnwire.ChannelID, lnwire.ShortChannelID,
 	return chanID1, chanID2, aliceChanID, bobChanID
 }
 
-// mockGetChanUpdateMessage helper function which returns topology update
-// of the channel
-func mockGetChanUpdateMessage() (*lnwire.ChannelUpdate, error) {
+// mockGetChanUpdateMessage helper function which returns topology update of
+// the channel
+func mockGetChanUpdateMessage(cid lnwire.ShortChannelID) (*lnwire.ChannelUpdate, error) {
 	return &lnwire.ChannelUpdate{
 		Signature: wireSig,
 	}, nil
@@ -902,6 +902,7 @@ func newThreeHopNetwork(t testing.TB, aliceChannel, firstBobChannel,
 	aliceTicker := time.NewTicker(50 * time.Millisecond)
 	aliceChannelLink := NewChannelLink(
 		ChannelLinkConfig{
+			Switch:             aliceServer.htlcSwitch,
 			FwrdingPolicy:      globalPolicy,
 			Peer:               bobServer,
 			Circuits:           aliceServer.htlcSwitch.CircuitModifier(),
@@ -911,11 +912,11 @@ func newThreeHopNetwork(t testing.TB, aliceChannel, firstBobChannel,
 				ErrorEncrypter, lnwire.FailCode) {
 				return obfuscator, lnwire.CodeNone
 			},
-			GetLastChannelUpdate: mockGetChanUpdateMessage,
-			Registry:             aliceServer.registry,
-			BlockEpochs:          aliceEpoch,
-			FeeEstimator:         feeEstimator,
-			PreimageCache:        pCache,
+			FetchLastChannelUpdate: mockGetChanUpdateMessage,
+			Registry:               aliceServer.registry,
+			BlockEpochs:            aliceEpoch,
+			FeeEstimator:           feeEstimator,
+			PreimageCache:          pCache,
 			UpdateContractSignals: func(*contractcourt.ContractSignals) error {
 				return nil
 			},
@@ -928,7 +929,7 @@ func newThreeHopNetwork(t testing.TB, aliceChannel, firstBobChannel,
 		aliceChannel,
 		startingHeight,
 	)
-	if err := aliceServer.htlcSwitch.addLink(aliceChannelLink); err != nil {
+	if err := aliceServer.htlcSwitch.AddLink(aliceChannelLink); err != nil {
 		t.Fatalf("unable to add alice channel link: %v", err)
 	}
 	go func() {
@@ -950,6 +951,7 @@ func newThreeHopNetwork(t testing.TB, aliceChannel, firstBobChannel,
 	firstBobTicker := time.NewTicker(50 * time.Millisecond)
 	firstBobChannelLink := NewChannelLink(
 		ChannelLinkConfig{
+			Switch:             bobServer.htlcSwitch,
 			FwrdingPolicy:      globalPolicy,
 			Peer:               aliceServer,
 			Circuits:           bobServer.htlcSwitch.CircuitModifier(),
@@ -959,11 +961,11 @@ func newThreeHopNetwork(t testing.TB, aliceChannel, firstBobChannel,
 				ErrorEncrypter, lnwire.FailCode) {
 				return obfuscator, lnwire.CodeNone
 			},
-			GetLastChannelUpdate: mockGetChanUpdateMessage,
-			Registry:             bobServer.registry,
-			BlockEpochs:          bobFirstEpoch,
-			FeeEstimator:         feeEstimator,
-			PreimageCache:        pCache,
+			FetchLastChannelUpdate: mockGetChanUpdateMessage,
+			Registry:               bobServer.registry,
+			BlockEpochs:            bobFirstEpoch,
+			FeeEstimator:           feeEstimator,
+			PreimageCache:          pCache,
 			UpdateContractSignals: func(*contractcourt.ContractSignals) error {
 				return nil
 			},
@@ -976,7 +978,7 @@ func newThreeHopNetwork(t testing.TB, aliceChannel, firstBobChannel,
 		firstBobChannel,
 		startingHeight,
 	)
-	if err := bobServer.htlcSwitch.addLink(firstBobChannelLink); err != nil {
+	if err := bobServer.htlcSwitch.AddLink(firstBobChannelLink); err != nil {
 		t.Fatalf("unable to add first bob channel link: %v", err)
 	}
 	go func() {
@@ -998,6 +1000,7 @@ func newThreeHopNetwork(t testing.TB, aliceChannel, firstBobChannel,
 	secondBobTicker := time.NewTicker(50 * time.Millisecond)
 	secondBobChannelLink := NewChannelLink(
 		ChannelLinkConfig{
+			Switch:             bobServer.htlcSwitch,
 			FwrdingPolicy:      globalPolicy,
 			Peer:               carolServer,
 			Circuits:           bobServer.htlcSwitch.CircuitModifier(),
@@ -1007,11 +1010,11 @@ func newThreeHopNetwork(t testing.TB, aliceChannel, firstBobChannel,
 				ErrorEncrypter, lnwire.FailCode) {
 				return obfuscator, lnwire.CodeNone
 			},
-			GetLastChannelUpdate: mockGetChanUpdateMessage,
-			Registry:             bobServer.registry,
-			BlockEpochs:          bobSecondEpoch,
-			FeeEstimator:         feeEstimator,
-			PreimageCache:        pCache,
+			FetchLastChannelUpdate: mockGetChanUpdateMessage,
+			Registry:               bobServer.registry,
+			BlockEpochs:            bobSecondEpoch,
+			FeeEstimator:           feeEstimator,
+			PreimageCache:          pCache,
 			UpdateContractSignals: func(*contractcourt.ContractSignals) error {
 				return nil
 			},
@@ -1024,7 +1027,7 @@ func newThreeHopNetwork(t testing.TB, aliceChannel, firstBobChannel,
 		secondBobChannel,
 		startingHeight,
 	)
-	if err := bobServer.htlcSwitch.addLink(secondBobChannelLink); err != nil {
+	if err := bobServer.htlcSwitch.AddLink(secondBobChannelLink); err != nil {
 		t.Fatalf("unable to add second bob channel link: %v", err)
 	}
 	go func() {
@@ -1046,6 +1049,7 @@ func newThreeHopNetwork(t testing.TB, aliceChannel, firstBobChannel,
 	carolTicker := time.NewTicker(50 * time.Millisecond)
 	carolChannelLink := NewChannelLink(
 		ChannelLinkConfig{
+			Switch:             carolServer.htlcSwitch,
 			FwrdingPolicy:      globalPolicy,
 			Peer:               bobServer,
 			Circuits:           carolServer.htlcSwitch.CircuitModifier(),
@@ -1055,11 +1059,11 @@ func newThreeHopNetwork(t testing.TB, aliceChannel, firstBobChannel,
 				ErrorEncrypter, lnwire.FailCode) {
 				return obfuscator, lnwire.CodeNone
 			},
-			GetLastChannelUpdate: mockGetChanUpdateMessage,
-			Registry:             carolServer.registry,
-			BlockEpochs:          carolEpoch,
-			FeeEstimator:         feeEstimator,
-			PreimageCache:        pCache,
+			FetchLastChannelUpdate: mockGetChanUpdateMessage,
+			Registry:               carolServer.registry,
+			BlockEpochs:            carolEpoch,
+			FeeEstimator:           feeEstimator,
+			PreimageCache:          pCache,
 			UpdateContractSignals: func(*contractcourt.ContractSignals) error {
 				return nil
 			},
@@ -1072,7 +1076,7 @@ func newThreeHopNetwork(t testing.TB, aliceChannel, firstBobChannel,
 		carolChannel,
 		startingHeight,
 	)
-	if err := carolServer.htlcSwitch.addLink(carolChannelLink); err != nil {
+	if err := carolServer.htlcSwitch.AddLink(carolChannelLink); err != nil {
 		t.Fatalf("unable to add carol channel link: %v", err)
 	}
 	go func() {
diff --git a/lnd_test.go b/lnd_test.go
index d3fe6e745..dd1c58785 100644
--- a/lnd_test.go
+++ b/lnd_test.go
@@ -479,8 +479,8 @@ func testUpdateChannelPolicy(net *lntest.NetworkHarness, t *harnessTest) {
 	ctxb := context.Background()
 
 	// Launch notification clients for all nodes, such that we can
-	// get notified when they discover new channels and updates
-	// in the graph.
+	// get notified when they discover new channels and updates in the
+	// graph.
 	aliceUpdates, aQuit := subscribeGraphNotifications(t, ctxb, net.Alice)
 	defer close(aQuit)
 	bobUpdates, bQuit := subscribeGraphNotifications(t, ctxb, net.Bob)
@@ -530,8 +530,9 @@ func testUpdateChannelPolicy(net *lntest.NetworkHarness, t *harnessTest) {
 		t.Fatalf("carol didn't report channel: %v", err)
 	}
 
-	// Update the fees for the channel Alice->Bob, and make sure
-	// all nodes learn about it.
+	// With our little cluster set up, we'll update the fees for the
+	// channel Bob side of the Alice->Bob channel, and make sure all nodes
+	// learn about it.
 	const feeBase = 1000000
 	baseFee := int64(1500)
 	feeRate := int64(12)
@@ -546,7 +547,7 @@ func testUpdateChannelPolicy(net *lntest.NetworkHarness, t *harnessTest) {
 		ChanPoint: chanPoint,
 	}
 
-	_, err = net.Alice.UpdateChannelPolicy(ctxb, req)
+	_, err = net.Bob.UpdateChannelPolicy(ctxb, req)
 	if err != nil {
 		t.Fatalf("unable to get alice's balance: %v", err)
 	}
@@ -572,7 +573,8 @@ func testUpdateChannelPolicy(net *lntest.NetworkHarness, t *harnessTest) {
 	// A closure that is used to wait for a channel updates that matches
 	// the channel policy update done by Alice.
 	waitForChannelUpdate := func(graphUpdates chan *lnrpc.GraphTopologyUpdate,
-		chanPoints ...*lnrpc.ChannelPoint) {
+		advertisingNode string, chanPoints ...*lnrpc.ChannelPoint) {
+
 		// Create a map containing all the channel points we are
 		// waiting for updates for.
 		cps := make(map[string]bool)
@@ -592,7 +594,7 @@ func testUpdateChannelPolicy(net *lntest.NetworkHarness, t *harnessTest) {
 					continue
 				}
 
-				if chanUpdate.AdvertisingNode != net.Alice.PubKeyStr {
+				if chanUpdate.AdvertisingNode != advertisingNode {
 					continue
 				}
 
@@ -623,16 +625,17 @@ func testUpdateChannelPolicy(net *lntest.NetworkHarness, t *harnessTest) {
 		}
 	}
 
-	// Wait for all nodes to have seen the policy update done by Alice.
-	waitForChannelUpdate(aliceUpdates, chanPoint)
-	waitForChannelUpdate(bobUpdates, chanPoint)
-	waitForChannelUpdate(carolUpdates, chanPoint)
+	// Wait for all nodes to have seen the policy update done by Bob.
+	waitForChannelUpdate(aliceUpdates, net.Bob.PubKeyStr, chanPoint)
+	waitForChannelUpdate(bobUpdates, net.Bob.PubKeyStr, chanPoint)
+	waitForChannelUpdate(carolUpdates, net.Bob.PubKeyStr, chanPoint)
 
 	// assertChannelPolicy asserts that the passed node's known channel
-	// policy for the passed chanPoint is consistent with Alice's current
+	// policy for the passed chanPoint is consistent with Bob's current
 	// expected policy values.
 	assertChannelPolicy := func(node *lntest.HarnessNode,
-		chanPoint *lnrpc.ChannelPoint) {
+		advertisingNode string, chanPoint *lnrpc.ChannelPoint) {
+
 		// Get a DescribeGraph from the node.
 		descReq := &lnrpc.ChannelGraphRequest{}
 		chanGraph, err := node.DescribeGraph(ctxb, descReq)
@@ -645,7 +648,7 @@ func testUpdateChannelPolicy(net *lntest.NetworkHarness, t *harnessTest) {
 		for _, e := range chanGraph.Edges {
 			if e.ChanPoint == txStr(chanPoint) {
 				edgeFound = true
-				if e.Node1Pub == net.Alice.PubKeyStr {
+				if e.Node1Pub == advertisingNode {
 					if e.Node1Policy.FeeBaseMsat != baseFee {
 						t.Fatalf("expected base fee "+
 							"%v, got %v", baseFee,
@@ -689,18 +692,42 @@ func testUpdateChannelPolicy(net *lntest.NetworkHarness, t *harnessTest) {
 
 	}
 
-	// Check that all nodes now know about Alice's updated policy.
-	assertChannelPolicy(net.Alice, chanPoint)
-	assertChannelPolicy(net.Bob, chanPoint)
-	assertChannelPolicy(carol, chanPoint)
+	// Check that all nodes now know about Bob's updated policy.
+	assertChannelPolicy(net.Alice, net.Bob.PubKeyStr, chanPoint)
+	assertChannelPolicy(net.Bob, net.Bob.PubKeyStr, chanPoint)
+	assertChannelPolicy(carol, net.Bob.PubKeyStr, chanPoint)
 
-	// Open channel to Carol.
+	// Now that all nodes have received the new channel update, we'll try
+	// to send a payment from Alice to Carol to ensure that Alice has
+	// internalized this fee update. This shouldn't affect the route that
+	// Alice takes though: we updated the Alice -> Bob channel and she
+	// doesn't pay for transit over that channel as it's direct.
+	payAmt := lnwire.MilliSatoshi(2000)
+	invoice := &lnrpc.Invoice{
+		Memo:  "testing",
+		Value: int64(payAmt),
+	}
+	resp, err := carol.AddInvoice(ctxb, invoice)
+	if err != nil {
+		t.Fatalf("unable to add invoice: %v", err)
+	}
+
+	ctxt, _ = context.WithTimeout(ctxb, timeout)
+	err = completePaymentRequests(
+		ctxt, net.Alice, []string{resp.PaymentRequest}, true,
+	)
+	if err != nil {
+		t.Fatalf("unable to send payment: %v", err)
+	}
+
+	// We'll now open a channel from Alice directly to Carol.
 	if err := net.ConnectNodes(ctxb, net.Alice, carol); err != nil {
 		t.Fatalf("unable to connect dave to alice: %v", err)
 	}
 	ctxt, _ = context.WithTimeout(ctxb, timeout)
-	chanPoint3 := openChannelAndAssert(ctxt, t, net, net.Alice, carol,
-		chanAmt, pushAmt)
+	chanPoint3 := openChannelAndAssert(
+		ctxt, t, net, net.Alice, carol, chanAmt, pushAmt,
+	)
 
 	ctxt, _ = context.WithTimeout(ctxb, time.Second*15)
 	err = net.Alice.WaitForNetworkChannelOpen(ctxt, chanPoint3)
@@ -712,8 +739,8 @@ func testUpdateChannelPolicy(net *lntest.NetworkHarness, t *harnessTest) {
 		t.Fatalf("bob didn't report channel: %v", err)
 	}
 
-	// Make a global update, and check that both channels'
-	// new policies get propagated.
+	// Make a global update, and check that both channels' new policies get
+	// propagated.
 	baseFee = int64(800)
 	feeRate = int64(123)
 	timeLockDelta = uint32(22)
@@ -730,21 +757,21 @@ func testUpdateChannelPolicy(net *lntest.NetworkHarness, t *harnessTest) {
 		t.Fatalf("unable to get alice's balance: %v", err)
 	}
 
-	// Wait for all nodes to have seen the policy updates
-	// for both of Alice's channels.
-	waitForChannelUpdate(aliceUpdates, chanPoint, chanPoint3)
-	waitForChannelUpdate(bobUpdates, chanPoint, chanPoint3)
-	waitForChannelUpdate(carolUpdates, chanPoint, chanPoint3)
+	// Wait for all nodes to have seen the policy updates for both of
+	// Alice's channels.
+	waitForChannelUpdate(aliceUpdates, net.Alice.PubKeyStr, chanPoint3)
+	waitForChannelUpdate(bobUpdates, net.Alice.PubKeyStr, chanPoint3)
+	waitForChannelUpdate(carolUpdates, net.Alice.PubKeyStr, chanPoint3)
 
-	// And finally check that all nodes remembers the policy
-	// update they received.
-	assertChannelPolicy(net.Alice, chanPoint)
-	assertChannelPolicy(net.Bob, chanPoint)
-	assertChannelPolicy(carol, chanPoint)
+	// And finally check that all nodes remembers the policy update they
+	// received.
+	assertChannelPolicy(net.Alice, net.Alice.PubKeyStr, chanPoint)
+	assertChannelPolicy(net.Bob, net.Alice.PubKeyStr, chanPoint)
+	assertChannelPolicy(carol, net.Alice.PubKeyStr, chanPoint)
 
-	assertChannelPolicy(net.Alice, chanPoint3)
-	assertChannelPolicy(net.Bob, chanPoint3)
-	assertChannelPolicy(carol, chanPoint3)
+	assertChannelPolicy(net.Alice, net.Alice.PubKeyStr, chanPoint3)
+	assertChannelPolicy(net.Bob, net.Alice.PubKeyStr, chanPoint3)
+	assertChannelPolicy(carol, net.Alice.PubKeyStr, chanPoint3)
 
 	// Close the channels.
 	ctxt, _ = context.WithTimeout(ctxb, timeout)
diff --git a/lnwire/short_channel_id.go b/lnwire/short_channel_id.go
index 36d38a3e3..b2b980aa2 100644
--- a/lnwire/short_channel_id.go
+++ b/lnwire/short_channel_id.go
@@ -36,7 +36,7 @@ func NewShortChanIDFromInt(chanID uint64) ShortChannelID {
 
 // ToUint64 converts the ShortChannelID into a compact format encoded within a
 // uint64 (8 bytes).
-func (c *ShortChannelID) ToUint64() uint64 {
+func (c ShortChannelID) ToUint64() uint64 {
 	// TODO(roasbeef): explicit error on overflow?
 	return ((uint64(c.BlockHeight) << 40) | (uint64(c.TxIndex) << 16) |
 		(uint64(c.TxPosition)))
diff --git a/peer.go b/peer.go
index 6f9be4a4a..0f9cab712 100644
--- a/peer.go
+++ b/peer.go
@@ -413,8 +413,9 @@ func (p *peer) loadActiveChannels(chans []*channeldb.OpenChannel) error {
 			Peer:                  p,
 			DecodeHopIterators:    p.server.sphinx.DecodeHopIterators,
 			ExtractErrorEncrypter: p.server.sphinx.ExtractErrorEncrypter,
-			GetLastChannelUpdate: createGetLastUpdate(p.server.chanRouter,
-				p.PubKey(), lnChan.ShortChanID()),
+			FetchLastChannelUpdate: fetchLastChanUpdate(
+				p.server.chanRouter, p.PubKey(),
+			),
 			DebugHTLC:      cfg.DebugHTLC,
 			HodlHTLC:       cfg.HodlHTLC,
 			Registry:       p.server.invoices,
@@ -1389,8 +1390,9 @@ out:
 				Peer:                  p,
 				DecodeHopIterators:    p.server.sphinx.DecodeHopIterators,
 				ExtractErrorEncrypter: p.server.sphinx.ExtractErrorEncrypter,
-				GetLastChannelUpdate: createGetLastUpdate(p.server.chanRouter,
-					p.PubKey(), newChanReq.channel.ShortChanID()),
+				FetchLastChannelUpdate: fetchLastChanUpdate(
+					p.server.chanRouter, p.PubKey(),
+				),
 				DebugHTLC:      cfg.DebugHTLC,
 				HodlHTLC:       cfg.HodlHTLC,
 				Registry:       p.server.invoices,
@@ -1906,21 +1908,20 @@ func (p *peer) PubKey() [33]byte {
 
 // TODO(roasbeef): make all start/stop mutexes a CAS
 
-// createGetLastUpdate returns the handler which serve as a source of the last
-// update of the channel in a form of lnwire update message.
-func createGetLastUpdate(router *routing.ChannelRouter,
-	pubKey [33]byte, chanID lnwire.ShortChannelID) func() (*lnwire.ChannelUpdate,
-	error) {
+// fetchLastChanUpdate returns a function which is able to retrieve the last
+// channel update for a target channel.
+func fetchLastChanUpdate(router *routing.ChannelRouter,
+	pubKey [33]byte) func(lnwire.ShortChannelID) (*lnwire.ChannelUpdate, error) {
 
-	return func() (*lnwire.ChannelUpdate, error) {
-		info, edge1, edge2, err := router.GetChannelByID(chanID)
+	return func(cid lnwire.ShortChannelID) (*lnwire.ChannelUpdate, error) {
+		info, edge1, edge2, err := router.GetChannelByID(cid)
 		if err != nil {
 			return nil, err
 		}
 
 		if edge1 == nil || edge2 == nil {
 			return nil, errors.Errorf("unable to find "+
-				"channel by ShortChannelID(%v)", chanID)
+				"channel by ShortChannelID(%v)", cid)
 		}
 
 		// If we're the outgoing node on the first edge, then that
@@ -1933,7 +1934,7 @@ func createGetLastUpdate(router *routing.ChannelRouter,
 			local = edge1
 		}
 
-		update := &lnwire.ChannelUpdate{
+		update := lnwire.ChannelUpdate{
 			ChainHash:       info.ChainHash,
 			ShortChannelID:  lnwire.NewShortChanIDFromInt(local.ChannelID),
 			Timestamp:       uint32(local.LastUpdate.Unix()),
@@ -1948,9 +1949,12 @@ func createGetLastUpdate(router *routing.ChannelRouter,
 			return nil, err
 		}
 
-		hswcLog.Debugf("Sending latest channel_update: %v",
-			spew.Sdump(update))
+		hswcLog.Tracef("Sending latest channel_update: %v",
+			newLogClosure(func() string {
+				return spew.Sdump(update)
+			}),
+		)
 
-		return update, nil
+		return &update, nil
 	}
 }
diff --git a/routing/router.go b/routing/router.go
index be92e6681..25b60d0c0 100644
--- a/routing/router.go
+++ b/routing/router.go
@@ -1724,12 +1724,12 @@ func (r *ChannelRouter) SendPayment(payment *LightningPayment) ([32]byte, *Route
 				// We'll now check to see if we've already
 				// reported a fee related failure for this
 				// node. If so, then we'll actually prune out
-				// the edge for now.
+				// the vertex for now.
 				chanID := update.ShortChannelID
 				_, ok := errFailedFeeChans[chanID]
 				if ok {
-					pruneEdgeFailure(
-						paySession, route, errSource,
+					pruneVertexFailure(
+						paySession, route, errSource, false,
 					)
 					continue
 				}
diff --git a/routing/router_test.go b/routing/router_test.go
index 2471654b1..8c73826ed 100644
--- a/routing/router_test.go
+++ b/routing/router_test.go
@@ -297,7 +297,7 @@ func TestSendPaymentErrorRepeatedFeeInsufficient(t *testing.T) {
 	// to luo ji for 100 satoshis.
 	var payHash [32]byte
 	payment := LightningPayment{
-		Target:      ctx.aliases["luoji"],
+		Target:      ctx.aliases["sophon"],
 		Amount:      lnwire.NewMSatFromSatoshis(1000),
 		PaymentHash: payHash,
 	}
@@ -306,9 +306,9 @@ func TestSendPaymentErrorRepeatedFeeInsufficient(t *testing.T) {
 	copy(preImage[:], bytes.Repeat([]byte{9}, 32))
 
 	// We'll also fetch the first outgoing channel edge from roasbeef to
-	// luo ji. We'll obtain this as we'll need to to generate the
+	// son goku. We'll obtain this as we'll need to to generate the
 	// FeeInsufficient error that we'll send back.
-	chanID := uint64(689530843)
+	chanID := uint64(3495345)
 	_, _, edgeUpateToFail, err := ctx.graph.FetchChannelEdgesByID(chanID)
 	if err != nil {
 		t.Fatalf("unable to fetch chan id: %v", err)
@@ -324,24 +324,21 @@ func TestSendPaymentErrorRepeatedFeeInsufficient(t *testing.T) {
 		FeeRate:         uint32(edgeUpateToFail.FeeProportionalMillionths),
 	}
 
-	sourceNode := ctx.router.selfNode
+	// The error will be returned by Son Goku.
+	sourceNode := ctx.aliases["songoku"]
 
 	// We'll now modify the SendToSwitch method to return an error for the
-	// outgoing channel to luo ji. This will be a fee related error, so it
-	// should only cause the edge to be pruned after the second attempt.
+	// outgoing channel to Son goku. This will be a fee related error, so
+	// it should only cause the edge to be pruned after the second attempt.
 	ctx.router.cfg.SendToSwitch = func(n [33]byte,
 		_ *lnwire.UpdateAddHTLC, _ *sphinx.Circuit) ([32]byte, error) {
 
-		if bytes.Equal(ctx.aliases["luoji"].SerializeCompressed(), n[:]) {
-			pub, err := sourceNode.PubKey()
-			if err != nil {
-				return preImage, err
-			}
+		if bytes.Equal(sourceNode.SerializeCompressed(), n[:]) {
 			return [32]byte{}, &htlcswitch.ForwardingError{
-				ErrorSource: pub,
+				ErrorSource: sourceNode,
 
 				// Within our error, we'll add a channel update
-				// which is meant to refelct he new fee
+				// which is meant to reflect he new fee
 				// schedule for the node/channel.
 				FailureMessage: &lnwire.FailFeeInsufficient{
 					Update: errChanUpdate,
@@ -371,8 +368,8 @@ func TestSendPaymentErrorRepeatedFeeInsufficient(t *testing.T) {
 			preImage[:], paymentPreImage[:])
 	}
 
-	// The route should have satoshi as the first hop.
-	if route.Hops[0].Channel.Node.Alias != "satoshi" {
+	// The route should have pham nuwen as the first hop.
+	if route.Hops[0].Channel.Node.Alias != "phamnuwen" {
 		t.Fatalf("route should go through satoshi as first hop, "+
 			"instead passes through: %v",
 			route.Hops[0].Channel.Node.Alias)
diff --git a/rpcserver.go b/rpcserver.go
index fd6f0518a..14cce2d39 100644
--- a/rpcserver.go
+++ b/rpcserver.go
@@ -3331,7 +3331,7 @@ func (r *rpcServer) UpdateChannelPolicy(ctx context.Context,
 		TimeLockDelta: req.TimeLockDelta,
 	}
 
-	rpcsLog.Tracef("[updatechanpolicy] updating channel policy base_fee=%v, "+
+	rpcsLog.Debugf("[updatechanpolicy] updating channel policy base_fee=%v, "+
 		"rate_float=%v, rate_fixed=%v, time_lock_delta: %v, targets=%v",
 		req.BaseFeeMsat, req.FeeRate, feeRateFixed, req.TimeLockDelta,
 		spew.Sdump(targetChans))