diff --git a/lightning/src/ln/channelmanager.rs b/lightning/src/ln/channelmanager.rs
index 1d87eccfe66..5ff1fcb0171 100644
--- a/lightning/src/ln/channelmanager.rs
+++ b/lightning/src/ln/channelmanager.rs
@@ -3271,8 +3271,8 @@ macro_rules! locked_close_channel {
 	}};
 	($self: ident, $peer_state: expr, $funded_chan: expr, $shutdown_res_mut: expr, FUNDED) => {{
 		if let Some((_, funding_txo, _, update)) = $shutdown_res_mut.monitor_update.take() {
-			handle_new_monitor_update!($self, funding_txo, update, $peer_state,
-				$funded_chan.context, REMAIN_LOCKED_UPDATE_ACTIONS_PROCESSED_LATER);
+			handle_new_monitor_update_actions_deferred!($self, funding_txo, update, $peer_state,
+				$funded_chan.context);
 		}
 		// If there's a possibility that we need to generate further monitor updates for this
 		// channel, we need to store the last update_id of it. However, we don't want to insert
@@ -3628,57 +3628,152 @@ macro_rules! handle_monitor_update_completion {
 	} }
 }
 
-macro_rules! handle_new_monitor_update {
-	($self: ident, $update_res: expr, $logger: expr, $channel_id: expr, _internal, $completed: expr) => { {
-		debug_assert!($self.background_events_processed_since_startup.load(Ordering::Acquire));
-		match $update_res {
-			ChannelMonitorUpdateStatus::UnrecoverableError => {
-				let err_str = "ChannelMonitor[Update] persistence failed unrecoverably. This indicates we cannot continue normal operation and must shut down.";
-				log_error!($logger, "{}", err_str);
-				panic!("{}", err_str);
-			},
-			ChannelMonitorUpdateStatus::InProgress => {
-				#[cfg(not(any(test, feature = "_externalize_tests")))]
-				if $self.monitor_update_type.swap(1, Ordering::Relaxed) == 2 {
-					panic!("Cannot use both ChannelMonitorUpdateStatus modes InProgress and Completed without restart");
-				}
-				log_debug!($logger, "ChannelMonitor update for {} in flight, holding messages until the update completes.",
-					$channel_id);
-				false
-			},
-			ChannelMonitorUpdateStatus::Completed => {
-				#[cfg(not(any(test, feature = "_externalize_tests")))]
-				if $self.monitor_update_type.swap(2, Ordering::Relaxed) == 1 {
-					panic!("Cannot use both ChannelMonitorUpdateStatus modes InProgress and Completed without restart");
-				}
-				$completed;
-				true
-			},
-		}
-	} };
-	($self: ident, $update_res: expr, $peer_state_lock: expr, $peer_state: expr, $per_peer_state_lock: expr, $chan: expr, INITIAL_MONITOR) => {
+/// Returns whether the monitor update is completed, `false` if the update is in-progress.
+fn handle_monitor_update_res<CM: AChannelManager, LG: Logger>(
+	cm: &CM, update_res: ChannelMonitorUpdateStatus, channel_id: ChannelId, logger: LG,
+) -> bool {
+	debug_assert!(cm.get_cm().background_events_processed_since_startup.load(Ordering::Acquire));
+	match update_res {
+		ChannelMonitorUpdateStatus::UnrecoverableError => {
+			let err_str = "ChannelMonitor[Update] persistence failed unrecoverably. This indicates we cannot continue normal operation and must shut down.";
+			log_error!(logger, "{}", err_str);
+			panic!("{}", err_str);
+		},
+		ChannelMonitorUpdateStatus::InProgress => {
+			#[cfg(not(any(test, feature = "_externalize_tests")))]
+			if cm.get_cm().monitor_update_type.swap(1, Ordering::Relaxed) == 2 {
+				panic!("Cannot use both ChannelMonitorUpdateStatus modes InProgress and Completed without restart");
+			}
+			log_debug!(logger, "ChannelMonitor update for {} in flight, holding messages until the update completes.",
+				channel_id);
+			false
+		},
+		ChannelMonitorUpdateStatus::Completed => {
+			#[cfg(not(any(test, feature = "_externalize_tests")))]
+			if cm.get_cm().monitor_update_type.swap(2, Ordering::Relaxed) == 1 {
+				panic!("Cannot use both ChannelMonitorUpdateStatus modes InProgress and Completed without restart");
+			}
+			true
+		},
+	}
+}
+
+macro_rules! handle_initial_monitor {
+	($self: ident, $update_res: expr, $peer_state_lock: expr, $peer_state: expr, $per_peer_state_lock: expr, $chan: expr) => {
 		let logger = WithChannelContext::from(&$self.logger, &$chan.context, None);
-		handle_new_monitor_update!($self, $update_res, logger, $chan.context.channel_id(), _internal,
-			handle_monitor_update_completion!($self, $peer_state_lock, $peer_state, $per_peer_state_lock, $chan))
+		let update_completed =
+			handle_monitor_update_res($self, $update_res, $chan.context.channel_id(), logger);
+		if update_completed {
+			handle_monitor_update_completion!(
+				$self,
+				$peer_state_lock,
+				$peer_state,
+				$per_peer_state_lock,
+				$chan
+			);
+		}
 	};
+}
+
+macro_rules! handle_post_close_monitor_update {
+	(
+		$self: ident, $funding_txo: expr, $update: expr, $peer_state_lock: expr, $peer_state: expr,
+		$per_peer_state_lock: expr, $counterparty_node_id: expr, $channel_id: expr
+	) => {{
+		let logger =
+			WithContext::from(&$self.logger, Some($counterparty_node_id), Some($channel_id), None);
+		let in_flight_updates;
+		let idx;
+		handle_new_monitor_update_internal!(
+			$self,
+			$funding_txo,
+			$update,
+			$peer_state,
+			logger,
+			$channel_id,
+			$counterparty_node_id,
+			in_flight_updates,
+			idx,
+			{
+				let _ = in_flight_updates.remove(idx);
+				if in_flight_updates.is_empty() {
+					let update_actions = $peer_state
+						.monitor_update_blocked_actions
+						.remove(&$channel_id)
+						.unwrap_or(Vec::new());
+
+					mem::drop($peer_state_lock);
+					mem::drop($per_peer_state_lock);
+
+					$self.handle_monitor_update_completion_actions(update_actions);
+				}
+			}
+		)
+	}};
+}
+
+/// Handles a new monitor update without dropping peer_state locks and calling
+/// [`ChannelManager::handle_monitor_update_completion_actions`] if the monitor update completed
+/// synchronously.
+///
+/// Useful because monitor updates need to be handled in the same mutex where the channel generated
+/// them (otherwise they can end up getting applied out-of-order) but it's not always possible to
+/// drop the aforementioned peer state locks at a given callsite. In this situation, use this macro
+/// to apply the monitor update immediately and handle the monitor update completion actions at a
+/// later time.
+macro_rules! handle_new_monitor_update_actions_deferred {
+	(
+		$self: ident, $funding_txo: expr, $update: expr, $peer_state: expr, $chan_context: expr
+	) => {{
+		let logger = WithChannelContext::from(&$self.logger, &$chan_context, None);
+		let chan_id = $chan_context.channel_id();
+		let counterparty_node_id = $chan_context.get_counterparty_node_id();
+		let in_flight_updates;
+		let idx;
+		handle_new_monitor_update_internal!(
+			$self,
+			$funding_txo,
+			$update,
+			$peer_state,
+			logger,
+			chan_id,
+			counterparty_node_id,
+			in_flight_updates,
+			idx,
+			{
+				let _ = in_flight_updates.remove(idx);
+			}
+		)
+	}};
+}
+
+macro_rules! handle_new_monitor_update_internal {
 	(
 		$self: ident, $funding_txo: expr, $update: expr, $peer_state: expr, $logger: expr,
 		$chan_id: expr, $counterparty_node_id: expr, $in_flight_updates: ident, $update_idx: ident,
-		_internal_outer, $completed: expr
-	) => { {
-		$in_flight_updates = &mut $peer_state.in_flight_monitor_updates.entry($chan_id)
-			.or_insert_with(|| ($funding_txo, Vec::new())).1;
+		$completed: expr
+	) => {{
+		$in_flight_updates = &mut $peer_state
+			.in_flight_monitor_updates
+			.entry($chan_id)
+			.or_insert_with(|| ($funding_txo, Vec::new()))
+			.1;
 		// During startup, we push monitor updates as background events through to here in
 		// order to replay updates that were in-flight when we shut down. Thus, we have to
 		// filter for uniqueness here.
-		$update_idx = $in_flight_updates.iter().position(|upd| upd == &$update)
-			.unwrap_or_else(|| {
+		$update_idx =
+			$in_flight_updates.iter().position(|upd| upd == &$update).unwrap_or_else(|| {
 				$in_flight_updates.push($update);
 				$in_flight_updates.len() - 1
 			});
 		if $self.background_events_processed_since_startup.load(Ordering::Acquire) {
-			let update_res = $self.chain_monitor.update_channel($chan_id, &$in_flight_updates[$update_idx]);
-			handle_new_monitor_update!($self, update_res, $logger, $chan_id, _internal, $completed)
+			let update_res =
+				$self.chain_monitor.update_channel($chan_id, &$in_flight_updates[$update_idx]);
+			let update_completed = handle_monitor_update_res($self, update_res, $chan_id, $logger);
+			if update_completed {
+				$completed;
+			}
+			update_completed
 		} else {
 			// We blindly assume that the ChannelMonitorUpdate will be regenerated on startup if we
 			// fail to persist it. This is a fairly safe assumption, however, since anything we do
@@ -3700,62 +3795,43 @@ macro_rules! handle_new_monitor_update {
 			$self.pending_background_events.lock().unwrap().push(event);
 			false
 		}
-	} };
-	(
-		$self: ident, $funding_txo: expr, $update: expr, $peer_state: expr, $chan_context: expr,
-		REMAIN_LOCKED_UPDATE_ACTIONS_PROCESSED_LATER
-	) => { {
-		let logger = WithChannelContext::from(&$self.logger, &$chan_context, None);
-		let chan_id = $chan_context.channel_id();
-		let counterparty_node_id = $chan_context.get_counterparty_node_id();
-		let in_flight_updates;
-		let idx;
-		handle_new_monitor_update!($self, $funding_txo, $update, $peer_state, logger, chan_id,
-			counterparty_node_id, in_flight_updates, idx, _internal_outer,
-			{
-				let _ = in_flight_updates.remove(idx);
-			})
-	} };
-	(
-		$self: ident, $funding_txo: expr, $update: expr, $peer_state_lock: expr, $peer_state: expr,
-		$per_peer_state_lock: expr, $counterparty_node_id: expr, $channel_id: expr, POST_CHANNEL_CLOSE
-	) => { {
-		let logger = WithContext::from(&$self.logger, Some($counterparty_node_id), Some($channel_id), None);
-		let in_flight_updates;
-		let idx;
-		handle_new_monitor_update!($self, $funding_txo, $update, $peer_state, logger,
-			$channel_id, $counterparty_node_id, in_flight_updates, idx, _internal_outer,
-			{
-				let _ = in_flight_updates.remove(idx);
-				if in_flight_updates.is_empty() {
-					let update_actions = $peer_state.monitor_update_blocked_actions
-						.remove(&$channel_id).unwrap_or(Vec::new());
-
-					mem::drop($peer_state_lock);
-					mem::drop($per_peer_state_lock);
+	}};
+}
 
-					$self.handle_monitor_update_completion_actions(update_actions);
-				}
-			})
-	} };
+macro_rules! handle_new_monitor_update {
 	(
 		$self: ident, $funding_txo: expr, $update: expr, $peer_state_lock: expr, $peer_state: expr,
 		$per_peer_state_lock: expr, $chan: expr
-	) => { {
+	) => {{
 		let logger = WithChannelContext::from(&$self.logger, &$chan.context, None);
 		let chan_id = $chan.context.channel_id();
 		let counterparty_node_id = $chan.context.get_counterparty_node_id();
 		let in_flight_updates;
 		let idx;
-		handle_new_monitor_update!($self, $funding_txo, $update, $peer_state, logger, chan_id,
-			counterparty_node_id, in_flight_updates, idx, _internal_outer,
+		handle_new_monitor_update_internal!(
+			$self,
+			$funding_txo,
+			$update,
+			$peer_state,
+			logger,
+			chan_id,
+			counterparty_node_id,
+			in_flight_updates,
+			idx,
 			{
 				let _ = in_flight_updates.remove(idx);
 				if in_flight_updates.is_empty() && $chan.blocked_monitor_updates_pending() == 0 {
-					handle_monitor_update_completion!($self, $peer_state_lock, $peer_state, $per_peer_state_lock, $chan);
+					handle_monitor_update_completion!(
+						$self,
+						$peer_state_lock,
+						$peer_state,
+						$per_peer_state_lock,
+						$chan
+					);
 				}
-			})
-	} };
+			}
+		)
+	}};
 }
 
 #[rustfmt::skip]
@@ -4432,9 +4508,9 @@ where
 			hash_map::Entry::Vacant(_) => {},
 		}
 
-		handle_new_monitor_update!(
+		handle_post_close_monitor_update!(
 			self, funding_txo, monitor_update, peer_state_lock, peer_state, per_peer_state,
-			counterparty_node_id, channel_id, POST_CHANNEL_CLOSE
+			counterparty_node_id, channel_id
 		);
 	}
 
@@ -8893,7 +8969,7 @@ This indicates a bug inside LDK. Please report this error at https://github.com/
 				.push(action);
 		}
 
-		handle_new_monitor_update!(
+		handle_post_close_monitor_update!(
 			self,
 			prev_hop.funding_txo,
 			preimage_update,
@@ -8901,8 +8977,7 @@ This indicates a bug inside LDK. Please report this error at https://github.com/
 			peer_state,
 			per_peer_state,
 			prev_hop.counterparty_node_id,
-			chan_id,
-			POST_CHANNEL_CLOSE
+			chan_id
 		);
 	}
 
@@ -10056,8 +10131,8 @@ This indicates a bug inside LDK. Please report this error at https://github.com/
 					}
 
 					if let Some(funded_chan) = e.insert(Channel::from(chan)).as_funded_mut() {
-						handle_new_monitor_update!(self, persist_state, peer_state_lock, peer_state,
-							per_peer_state, funded_chan, INITIAL_MONITOR);
+						handle_initial_monitor!(self, persist_state, peer_state_lock, peer_state,
+							per_peer_state, funded_chan);
 					} else {
 						unreachable!("This must be a funded channel as we just inserted it.");
 					}
@@ -10220,7 +10295,7 @@ This indicates a bug inside LDK. Please report this error at https://github.com/
 					})
 				{
 					Ok((funded_chan, persist_status)) => {
-						handle_new_monitor_update!(self, persist_status, peer_state_lock, peer_state, per_peer_state, funded_chan, INITIAL_MONITOR);
+						handle_initial_monitor!(self, persist_status, peer_state_lock, peer_state, per_peer_state, funded_chan);
 						Ok(())
 					},
 					Err(e) => try_channel_entry!(self, peer_state, Err(e), chan_entry),
@@ -10845,8 +10920,8 @@ This indicates a bug inside LDK. Please report this error at https://github.com/
 					if let Some(monitor) = monitor_opt {
 						let monitor_res = self.chain_monitor.watch_channel(monitor.channel_id(), monitor);
 						if let Ok(persist_state) = monitor_res {
-							handle_new_monitor_update!(self, persist_state, peer_state_lock, peer_state,
-								per_peer_state, chan, INITIAL_MONITOR);
+							handle_initial_monitor!(self, persist_state, peer_state_lock, peer_state,
+								per_peer_state, chan);
 						} else {
 							let logger = WithChannelContext::from(&self.logger, &chan.context, None);
 							log_error!(logger, "Persisting initial ChannelMonitor failed, implying the channel ID was duplicated");
@@ -13283,7 +13358,7 @@ where
 						};
 						self.pending_background_events.lock().unwrap().push(event);
 					} else {
-						handle_new_monitor_update!(
+						handle_post_close_monitor_update!(
 							self,
 							channel_funding_outpoint,
 							update,
@@ -13291,8 +13366,7 @@ where
 							peer_state,
 							per_peer_state,
 							counterparty_node_id,
-							channel_id,
-							POST_CHANNEL_CLOSE
+							channel_id
 						);
 					}
 				},
@@ -13976,13 +14050,12 @@ where
 											insert_short_channel_id!(short_to_chan_info, funded_channel);
 
 											if let Some(monitor_update) = monitor_update_opt {
-												handle_new_monitor_update!(
+												handle_new_monitor_update_actions_deferred!(
 													self,
 													funding_txo,
 													monitor_update,
 													peer_state,
-													funded_channel.context,
-													REMAIN_LOCKED_UPDATE_ACTIONS_PROCESSED_LATER
+													funded_channel.context
 												);
 												to_process_monitor_update_actions.push((
 													counterparty_node_id, channel_id