diff --git a/src/wallet/wallet.cpp b/src/wallet/wallet.cpp
index bdf6d3c7a6..2775f4def3 100644
--- a/src/wallet/wallet.cpp
+++ b/src/wallet/wallet.cpp
@@ -2534,8 +2534,25 @@ bool CWallet::CreateTransaction(const vector<CRecipient>& vecSend, CWalletTx& wt
                     return false;
                 }
 
-                if (nFeeRet >= nFeeNeeded)
+                if (nFeeRet >= nFeeNeeded) {
+                    // Reduce fee to only the needed amount if we have change
+                    // output to increase.  This prevents potential overpayment
+                    // in fees if the coins selected to meet nFeeNeeded result
+                    // in a transaction that requires less fee than the prior
+                    // iteration.
+                    // TODO: The case where nSubtractFeeFromAmount > 0 remains
+                    // to be addressed because it requires returning the fee to
+                    // the payees and not the change output.
+                    // TODO: The case where there is no change output remains
+                    // to be addressed so we avoid creating too small an output.
+                    if (nFeeRet > nFeeNeeded && nChangePosInOut != -1 && nSubtractFeeFromAmount == 0) {
+                        CAmount extraFeePaid = nFeeRet - nFeeNeeded;
+                        vector<CTxOut>::iterator change_position = txNew.vout.begin()+nChangePosInOut;
+                        change_position->nValue += extraFeePaid;
+                        nFeeRet -= extraFeePaid;
+                    }
                     break; // Done, enough fee included.
+                }
 
                 // Try to reduce change to include necessary fee
                 if (nChangePosInOut != -1 && nSubtractFeeFromAmount == 0) {