diff --git a/fundingmanager.go b/fundingmanager.go
index 46338af39..9d1e234ca 100644
--- a/fundingmanager.go
+++ b/fundingmanager.go
@@ -1137,20 +1137,21 @@ func (f *fundingManager) ProcessFundingMsg(msg lnwire.Message, peer lnpeer.Peer)
 func commitmentType(localFeatures,
 	remoteFeatures *lnwire.FeatureVector) lnwallet.CommitmentType {
 
-	// If both peers are signalling support for anchor commitments, this
-	// implicitly mean we'll create the channel of this type. Note that
-	// this also enables tweakless commitments, as anchor commitments are
-	// always tweakless.
-	localAnchors := localFeatures.HasFeature(
-		lnwire.AnchorsOptional,
+	// If both peers are signalling support for anchor commitments with
+	// zero-fee HTLC transactions, we'll use this type.
+	localZeroFee := localFeatures.HasFeature(
+		lnwire.AnchorsZeroFeeHtlcTxOptional,
 	)
-	remoteAnchors := remoteFeatures.HasFeature(
-		lnwire.AnchorsOptional,
+	remoteZeroFee := remoteFeatures.HasFeature(
+		lnwire.AnchorsZeroFeeHtlcTxOptional,
 	)
-	if localAnchors && remoteAnchors {
-		return lnwallet.CommitmentTypeAnchors
+	if localZeroFee && remoteZeroFee {
+		return lnwallet.CommitmentTypeAnchorsZeroFeeHtlcTx
 	}
 
+	// Since we don't want to support the "legacy" anchor type, we will
+	// fall back to static remote key if the nodes don't support the zero
+	// fee HTLC tx anchor type.
 	localTweakless := localFeatures.HasFeature(
 		lnwire.StaticRemoteKeyOptional,
 	)
@@ -1306,10 +1307,9 @@ func (f *fundingManager) handleFundingOpen(peer lnpeer.Peer,
 	// responding side of a single funder workflow, we don't commit any
 	// funds to the channel ourselves.
 	//
-	// Before we init the channel, we'll also check to see if we've
-	// negotiated the new tweakless commitment format. This is only the
-	// case if *both* us and the remote peer are signaling the proper
-	// feature bit.
+	// Before we init the channel, we'll also check to see what commitment
+	// format we can use with this peer. This is dependent on *both* us and
+	// the remote peer are signaling the proper feature bit.
 	commitType := commitmentType(
 		peer.LocalFeatures(), peer.RemoteFeatures(),
 	)
@@ -3116,7 +3116,6 @@ func (f *fundingManager) handleInitFundingMsg(msg *initFundingMsg) {
 	case chainreg.LitecoinChain:
 		ourDustLimit = chainreg.DefaultLitecoinDustLimit
 	}
-
 	fndgLog.Infof("Initiating fundingRequest(local_amt=%v "+
 		"(subtract_fees=%v), push_amt=%v, chain_hash=%v, peer=%x, "+
 		"dust_limit=%v, min_confs=%v)", localAmt, msg.subtractFees,
@@ -3185,10 +3184,9 @@ func (f *fundingManager) handleInitFundingMsg(msg *initFundingMsg) {
 	// wallet doesn't have enough funds to commit to this channel, then the
 	// request will fail, and be aborted.
 	//
-	// Before we init the channel, we'll also check to see if we've
-	// negotiated the new tweakless commitment format. This is only the
-	// case if *both* us and the remote peer are signaling the proper
-	// feature bit.
+	// Before we init the channel, we'll also check to see what commitment
+	// format we can use with this peer. This is dependent on *both* us and
+	// the remote peer are signaling the proper feature bit.
 	commitType := commitmentType(
 		msg.peer.LocalFeatures(), msg.peer.RemoteFeatures(),
 	)
diff --git a/lnwallet/reservation.go b/lnwallet/reservation.go
index 45f5ebce0..a5aca0ffb 100644
--- a/lnwallet/reservation.go
+++ b/lnwallet/reservation.go
@@ -28,10 +28,11 @@ const (
 	// to_remote key is static.
 	CommitmentTypeTweakless
 
-	// CommitmentTypeAnchors is a commitment type that is tweakless, and
-	// has extra anchor ouputs in order to bump the fee of the commitment
-	// transaction.
-	CommitmentTypeAnchors
+	// CommitmentTypeAnchorsZeroFeeHtlcTx is a commitment type that is an
+	// extension of the outdated CommitmentTypeAnchors, which in addition
+	// requires second-level HTLC transactions to be signed using a
+	// zero-fee.
+	CommitmentTypeAnchorsZeroFeeHtlcTx
 )
 
 // String returns the name of the CommitmentType.
@@ -41,8 +42,8 @@ func (c CommitmentType) String() string {
 		return "legacy"
 	case CommitmentTypeTweakless:
 		return "tweakless"
-	case CommitmentTypeAnchors:
-		return "anchors"
+	case CommitmentTypeAnchorsZeroFeeHtlcTx:
+		return "anchors-zero-fee-second-level"
 	default:
 		return "invalid"
 	}
@@ -182,7 +183,7 @@ func NewChannelReservation(capacity, localFundingAmt btcutil.Amount,
 	// Based on the channel type, we determine the initial commit weight
 	// and fee.
 	commitWeight := int64(input.CommitWeight)
-	if commitType == CommitmentTypeAnchors {
+	if commitType == CommitmentTypeAnchorsZeroFeeHtlcTx {
 		commitWeight = input.AnchorCommitWeight
 	}
 	commitFee := commitFeePerKw.FeeForWeight(commitWeight)
@@ -195,7 +196,7 @@ func NewChannelReservation(capacity, localFundingAmt btcutil.Amount,
 	// The total fee paid by the initiator will be the commitment fee in
 	// addition to the two anchor outputs.
 	feeMSat := lnwire.NewMSatFromSatoshis(commitFee)
-	if commitType == CommitmentTypeAnchors {
+	if commitType == CommitmentTypeAnchorsZeroFeeHtlcTx {
 		feeMSat += 2 * lnwire.NewMSatFromSatoshis(anchorSize)
 	}
 
@@ -280,8 +281,7 @@ func NewChannelReservation(capacity, localFundingAmt btcutil.Amount,
 		// Both the tweakless type and the anchor type is tweakless,
 		// hence set the bit.
 		if commitType == CommitmentTypeTweakless ||
-			commitType == CommitmentTypeAnchors {
-
+			commitType == CommitmentTypeAnchorsZeroFeeHtlcTx {
 			chanType |= channeldb.SingleFunderTweaklessBit
 		} else {
 			chanType |= channeldb.SingleFunderBit
@@ -315,9 +315,11 @@ func NewChannelReservation(capacity, localFundingAmt btcutil.Amount,
 		chanType |= channeldb.DualFunderBit
 	}
 
-	// We are adding anchor outputs to our commitment.
-	if commitType == CommitmentTypeAnchors {
+	// We are adding anchor outputs to our commitment. We only support this
+	// in combination with zero-fee second-levels HTLCs.
+	if commitType == CommitmentTypeAnchorsZeroFeeHtlcTx {
 		chanType |= channeldb.AnchorOutputsBit
+		chanType |= channeldb.ZeroHtlcTxFeeBit
 	}
 
 	// If the channel is meant to be frozen, then we'll set the frozen bit