diff --git a/lnrpc/walletrpc/walletkit_server.go b/lnrpc/walletrpc/walletkit_server.go
index b8fcbc776..6a1b8d116 100644
--- a/lnrpc/walletrpc/walletkit_server.go
+++ b/lnrpc/walletrpc/walletkit_server.go
@@ -1551,21 +1551,82 @@ func (w *WalletKit) fundPsbtInternalWallet(account string,
 				return err
 			}
 
+			// filterFn makes sure utxos which are unconfirmed and
+			// still used by the sweeper are not used.
+			filterFn := func(u *lnwallet.Utxo) bool {
+				// Confirmed utxos are always allowed.
+				if u.Confirmations > 0 {
+					return true
+				}
+
+				// Unconfirmed utxos in use by the sweeper are
+				// not stable to use because they can be
+				// replaced.
+				if w.cfg.Sweeper.IsSweeperOutpoint(u.OutPoint) {
+					log.Warnf("Cannot use unconfirmed "+
+						"utxo=%v because it is "+
+						"unstable and could be "+
+						"replaced", u.OutPoint)
+
+					return false
+				}
+
+				return true
+			}
+
+			eligible := fn.Filter(filterFn, utxos)
+
 			// Validate all inputs against our known list of UTXOs
 			// now.
-			err = verifyInputsUnspent(packet.UnsignedTx.TxIn, utxos)
+			err = verifyInputsUnspent(
+				packet.UnsignedTx.TxIn, eligible,
+			)
 			if err != nil {
 				return err
 			}
 		}
 
+		// currentHeight is needed to determine whether the internal
+		// wallet utxo is still unconfirmed.
+		_, currentHeight, err := w.cfg.Chain.GetBestBlock()
+		if err != nil {
+			return fmt.Errorf("unable to retrieve current "+
+				"height: %v", err)
+		}
+
+		// restrictUnstableUtxos is a filter function which disallows
+		// the usage of unconfirmed outputs published (still in use) by
+		// the sweeper.
+		restrictUnstableUtxos := func(utxo wtxmgr.Credit) bool {
+			// Wallet utxos which are unmined have a height
+			// of -1.
+			if utxo.Height != -1 && utxo.Height <= currentHeight {
+				// Confirmed utxos are always allowed.
+				return true
+			}
+
+			// Utxos used by the sweeper are not used for
+			// channel openings.
+			allowed := !w.cfg.Sweeper.IsSweeperOutpoint(
+				utxo.OutPoint,
+			)
+			if !allowed {
+				log.Warnf("Cannot use unconfirmed "+
+					"utxo=%v because it is "+
+					"unstable and could be "+
+					"replaced", utxo.OutPoint)
+			}
+
+			return allowed
+		}
+
 		// We made sure the input from the user is as sane as possible.
 		// We can now ask the wallet to fund the TX. This will not yet
 		// lock any coins but might still change the wallet DB by
 		// generating a new change address.
 		changeIndex, err := w.cfg.Wallet.FundPsbt(
-			packet, minConfs, feeSatPerKW, account,
-			keyScope, strategy,
+			packet, minConfs, feeSatPerKW, account, keyScope,
+			strategy, restrictUnstableUtxos,
 		)
 		if err != nil {
 			return fmt.Errorf("wallet couldn't fund PSBT: %w", err)
diff --git a/lntest/mock/walletcontroller.go b/lntest/mock/walletcontroller.go
index 21d78add3..52aecb382 100644
--- a/lntest/mock/walletcontroller.go
+++ b/lntest/mock/walletcontroller.go
@@ -208,7 +208,8 @@ func (w *WalletController) ListLeasedOutputs() ([]*base.ListLeasedOutputResult,
 
 // FundPsbt currently does nothing.
 func (w *WalletController) FundPsbt(*psbt.Packet, int32, chainfee.SatPerKWeight,
-	string, *waddrmgr.KeyScope, base.CoinSelectionStrategy) (int32, error) {
+	string, *waddrmgr.KeyScope, base.CoinSelectionStrategy,
+	func(utxo wtxmgr.Credit) bool) (int32, error) {
 
 	return 0, nil
 }
diff --git a/lnwallet/btcwallet/psbt.go b/lnwallet/btcwallet/psbt.go
index 0fdf76c38..ec88cd92f 100644
--- a/lnwallet/btcwallet/psbt.go
+++ b/lnwallet/btcwallet/psbt.go
@@ -15,6 +15,7 @@ import (
 	"github.com/btcsuite/btcd/wire"
 	"github.com/btcsuite/btcwallet/waddrmgr"
 	"github.com/btcsuite/btcwallet/wallet"
+	"github.com/btcsuite/btcwallet/wtxmgr"
 	"github.com/lightningnetwork/lnd/input"
 	"github.com/lightningnetwork/lnd/keychain"
 	"github.com/lightningnetwork/lnd/lnwallet"
@@ -60,6 +61,9 @@ var (
 // imported public keys. For custom account, no key scope should be provided
 // as the coin selection key scope will always be used to generate the change
 // address.
+// The function argument `allowUtxo` specifies a filter function for utxos
+// during coin selection. It should return true for utxos that can be used and
+// false for those that should be excluded.
 //
 // NOTE: If the packet doesn't contain any inputs, coin selection is performed
 // automatically. The account parameter must be non-empty as it determines which
@@ -74,7 +78,8 @@ var (
 func (b *BtcWallet) FundPsbt(packet *psbt.Packet, minConfs int32,
 	feeRate chainfee.SatPerKWeight, accountName string,
 	changeScope *waddrmgr.KeyScope,
-	strategy wallet.CoinSelectionStrategy) (int32, error) {
+	strategy wallet.CoinSelectionStrategy,
+	allowUtxo func(wtxmgr.Credit) bool) (int32, error) {
 
 	// The fee rate is passed in using units of sat/kw, so we'll convert
 	// this to sat/KB as the CreateSimpleTx method requires this unit.
@@ -130,6 +135,9 @@ func (b *BtcWallet) FundPsbt(packet *psbt.Packet, minConfs int32,
 	if changeScope != nil {
 		opts = append(opts, wallet.WithCustomChangeScope(changeScope))
 	}
+	if allowUtxo != nil {
+		opts = append(opts, wallet.WithUtxoFilter(allowUtxo))
+	}
 
 	// Let the wallet handle coin selection and/or fee estimation based on
 	// the partial TX information in the packet.
diff --git a/lnwallet/interface.go b/lnwallet/interface.go
index 59e6f5aab..a48e92560 100644
--- a/lnwallet/interface.go
+++ b/lnwallet/interface.go
@@ -468,7 +468,8 @@ type WalletController interface {
 	FundPsbt(packet *psbt.Packet, minConfs int32,
 		feeRate chainfee.SatPerKWeight, account string,
 		changeScope *waddrmgr.KeyScope,
-		strategy base.CoinSelectionStrategy) (int32, error)
+		strategy base.CoinSelectionStrategy,
+		allowUtxo func(wtxmgr.Credit) bool) (int32, error)
 
 	// SignPsbt expects a partial transaction with all inputs and outputs
 	// fully declared and tries to sign all unsigned inputs that have all
diff --git a/lnwallet/mock.go b/lnwallet/mock.go
index 0146df57e..1873de79a 100644
--- a/lnwallet/mock.go
+++ b/lnwallet/mock.go
@@ -217,7 +217,8 @@ func (w *mockWalletController) ListLeasedOutputs() (
 // FundPsbt currently does nothing.
 func (w *mockWalletController) FundPsbt(*psbt.Packet, int32,
 	chainfee.SatPerKWeight, string, *waddrmgr.KeyScope,
-	base.CoinSelectionStrategy) (int32, error) {
+	base.CoinSelectionStrategy, func(utxo wtxmgr.Credit) bool) (int32,
+	error) {
 
 	return 0, nil
 }