diff --git a/channeldb/graph.go b/channeldb/graph.go
index 3a8f6c56..8a41e78b 100644
--- a/channeldb/graph.go
+++ b/channeldb/graph.go
@@ -2832,6 +2832,22 @@ func (c *ChannelEdgePolicy) ComputeFee(
 	return c.FeeBaseMSat + (amt*c.FeeProportionalMillionths)/feeRateParts
 }
 
+// divideCeil divides dividend by factor and rounds the result up.
+func divideCeil(dividend, factor lnwire.MilliSatoshi) lnwire.MilliSatoshi {
+	return (dividend + factor - 1) / factor
+}
+
+// ComputeFeeFromIncoming computes the fee to forward an HTLC given the incoming
+// amount.
+func (c *ChannelEdgePolicy) ComputeFeeFromIncoming(
+	incomingAmt lnwire.MilliSatoshi) lnwire.MilliSatoshi {
+
+	return incomingAmt - divideCeil(
+		feeRateParts*(incomingAmt-c.FeeBaseMSat),
+		feeRateParts+c.FeeProportionalMillionths,
+	)
+}
+
 // FetchChannelEdgesByOutpoint attempts to lookup the two directed edges for
 // the channel identified by the funding outpoint. If the channel can't be
 // found, then ErrEdgeNotFound is returned. A struct which houses the general
diff --git a/channeldb/graph_test.go b/channeldb/graph_test.go
index 5068228f..de8774a9 100644
--- a/channeldb/graph_test.go
+++ b/channeldb/graph_test.go
@@ -3173,3 +3173,25 @@ func TestLightningNodeSigVerification(t *testing.T) {
 		t.Fatalf("unable to verify sig")
 	}
 }
+
+// TestComputeFee tests fee calculation based on both in- and outgoing amt.
+func TestComputeFee(t *testing.T) {
+	var (
+		policy = ChannelEdgePolicy{
+			FeeBaseMSat:               10000,
+			FeeProportionalMillionths: 30000,
+		}
+		outgoingAmt = lnwire.MilliSatoshi(1000000)
+		expectedFee = lnwire.MilliSatoshi(40000)
+	)
+
+	fee := policy.ComputeFee(outgoingAmt)
+	if fee != expectedFee {
+		t.Fatalf("expected fee %v, got %v", expectedFee, fee)
+	}
+
+	fwdFee := policy.ComputeFeeFromIncoming(outgoingAmt + fee)
+	if fwdFee != expectedFee {
+		t.Fatalf("expected fee %v, but got %v", fee, fwdFee)
+	}
+}