diff --git a/libraries/AP_NavEKF2/AP_NavEKF2.cpp b/libraries/AP_NavEKF2/AP_NavEKF2.cpp
index 259926899e..3dc7526e7f 100644
--- a/libraries/AP_NavEKF2/AP_NavEKF2.cpp
+++ b/libraries/AP_NavEKF2/AP_NavEKF2.cpp
@@ -574,6 +574,14 @@ const AP_Param::GroupInfo NavEKF2::var_info[] = {
     // @Units: mGauss
     AP_GROUPINFO("MAG_EF_LIM", 52, NavEKF2, _mag_ef_limit, 50),
     
+    // @Param: HRT_FILT
+    // @DisplayName: Height rate filter crossover frequency
+    // @Description: Specifies the crossover frequency of the complementary filter used to calculate the output predictor height rate derivative.
+    // @Range: 0.1 100.0
+    // @Units: Hz
+    // @RebootRequired: False
+    AP_GROUPINFO("HRT_FILT", 53, NavEKF2, _hrt_filt_freq, 2.0f),
+
     AP_GROUPEND
 };
 
diff --git a/libraries/AP_NavEKF2/AP_NavEKF2.h b/libraries/AP_NavEKF2/AP_NavEKF2.h
index e5b4dee6ca..b0d4bc39ef 100644
--- a/libraries/AP_NavEKF2/AP_NavEKF2.h
+++ b/libraries/AP_NavEKF2/AP_NavEKF2.h
@@ -417,6 +417,7 @@ private:
     AP_Int8 _extnavDelay_ms;        // effective average delay of external nav system measurements relative to inertial measurements (msec)
     AP_Int8 _flowUse;               // Controls if the optical flow data is fused into the main navigation estimator and/or the terrain estimator.
     AP_Int16 _mag_ef_limit;         // limit on difference between WMM tables and learned earth field.
+    AP_Float _hrt_filt_freq;        // frequency of output observer height rate complementary filter in Hz
 
 // Possible values for _flowUse
 #define FLOW_USE_NONE    0
diff --git a/libraries/AP_NavEKF2/AP_NavEKF2_Outputs.cpp b/libraries/AP_NavEKF2/AP_NavEKF2_Outputs.cpp
index 054915ee93..ccb958b05b 100644
--- a/libraries/AP_NavEKF2/AP_NavEKF2_Outputs.cpp
+++ b/libraries/AP_NavEKF2/AP_NavEKF2_Outputs.cpp
@@ -217,7 +217,7 @@ float NavEKF2_core::getPosDownDerivative(void) const
 {
     // return the value calculated from a complementary filter applied to the EKF height and vertical acceleration
     // correct for the IMU offset (EKF calculations are at the IMU)
-    return posDownDerivative + velOffsetNED.z;
+    return vertCompFiltState.vel + velOffsetNED.z;
 }
 
 // This returns the specific forces in the NED frame
diff --git a/libraries/AP_NavEKF2/AP_NavEKF2_PosVelFusion.cpp b/libraries/AP_NavEKF2/AP_NavEKF2_PosVelFusion.cpp
index 4cf7ddf07e..61d947f4f2 100644
--- a/libraries/AP_NavEKF2/AP_NavEKF2_PosVelFusion.cpp
+++ b/libraries/AP_NavEKF2/AP_NavEKF2_PosVelFusion.cpp
@@ -159,6 +159,7 @@ void NavEKF2_core::ResetHeight(void)
     for (uint8_t i=0; i<imu_buffer_length; i++) {
         storedOutput[i].position.z = stateStruct.position.z;
     }
+    vertCompFiltState.pos = stateStruct.position.z;
 
     // Calculate the position jump due to the reset
     posResetD = stateStruct.position.z - posResetD;
@@ -189,6 +190,7 @@ void NavEKF2_core::ResetHeight(void)
     }
     outputDataNew.velocity.z = stateStruct.velocity.z;
     outputDataDelayed.velocity.z = stateStruct.velocity.z;
+    vertCompFiltState.vel = outputDataNew.velocity.z;
 
     // reset the corresponding covariances
     zeroRows(P,5,5);
@@ -385,6 +387,7 @@ void NavEKF2_core::SelectVelPosFusion()
 
             // Add the offset to the output observer states
             outputDataNew.position.z += posResetD;
+            vertCompFiltState.pos = outputDataNew.position.z;
             outputDataDelayed.position.z += posResetD;
             for (uint8_t i=0; i<imu_buffer_length; i++) {
                 storedOutput[i].position.z += posResetD;
diff --git a/libraries/AP_NavEKF2/AP_NavEKF2_core.cpp b/libraries/AP_NavEKF2/AP_NavEKF2_core.cpp
index 1fa81e4d2d..e55d30ea54 100644
--- a/libraries/AP_NavEKF2/AP_NavEKF2_core.cpp
+++ b/libraries/AP_NavEKF2/AP_NavEKF2_core.cpp
@@ -241,8 +241,7 @@ void NavEKF2_core::InitialiseVariables()
     gpsVertVelFilt = 0.0f;
     gpsHorizVelFilt = 0.0f;
     memset(&statesArray, 0, sizeof(statesArray));
-    posDownDerivative = 0.0f;
-    posDown = 0.0f;
+    memset(&vertCompFiltState, 0, sizeof(vertCompFiltState));
     posVelFusionDelayed = false;
     optFlowFusionDelayed = false;
     airSpdFusionDelayed = false;
@@ -751,6 +750,24 @@ void NavEKF2_core::calcOutputStates()
     // sum delta velocities to get velocity
     outputDataNew.velocity += delVelNav;
 
+    // Implement third order complementary filter for height and height rate
+    // Reference Paper :
+    // Optimizing the Gains of the Baro-Inertial Vertical Channel
+    // Widnall W.S, Sinha P.K,
+    // AIAA Journal of Guidance and Control, 78-1307R
+
+    // Perform filter calculation using backwards Euler integration
+    // Coefficients selected to place all three filter poles at omega
+    const float CompFiltOmega = M_2PI * constrain_float(frontend->_hrt_filt_freq, 0.1f, 100.0f);
+    float omega2 = CompFiltOmega * CompFiltOmega;
+    float pos_err = outputDataNew.position.z - vertCompFiltState.pos;
+    float integ1_input = pos_err * omega2 * CompFiltOmega * imuDataNew.delVelDT;
+    vertCompFiltState.acc += integ1_input;
+    float integ2_input = delVelNav.z + (vertCompFiltState.acc + pos_err * omega2 * 3.0f) * imuDataNew.delVelDT;
+    vertCompFiltState.vel += integ2_input;
+    float integ3_input = (vertCompFiltState.vel + pos_err * CompFiltOmega * 3.0f) * imuDataNew.delVelDT;
+    vertCompFiltState.pos += integ3_input; 
+
     // apply a trapezoidal integration to velocities to calculate position
     outputDataNew.position += (outputDataNew.velocity + lastVelocity) * (imuDataNew.delVelDT*0.5f);
 
@@ -1406,8 +1423,8 @@ void NavEKF2_core::StoreOutputReset()
     }
     outputDataDelayed = outputDataNew;
     // reset the states for the complementary filter used to provide a vertical position dervative output
-    posDown = stateStruct.position.z;
-    posDownDerivative = stateStruct.velocity.z;
+    vertCompFiltState.pos = stateStruct.position.z;
+    vertCompFiltState.vel = stateStruct.velocity.z;
 }
 
 // Reset the stored output quaternion history to current EKF state
diff --git a/libraries/AP_NavEKF2/AP_NavEKF2_core.h b/libraries/AP_NavEKF2/AP_NavEKF2_core.h
index 4a14e52f7e..1ce57d38dc 100644
--- a/libraries/AP_NavEKF2/AP_NavEKF2_core.h
+++ b/libraries/AP_NavEKF2/AP_NavEKF2_core.h
@@ -951,8 +951,11 @@ private:
     Vector3f posOffsetNED;          // This adds to the earth frame position estimate at the IMU to give the position at the body origin (m)
 
     // variables used to calculate a vertical velocity that is kinematically consistent with the verical position
-    float posDownDerivative;        // Rate of chage of vertical position (dPosD/dt) in m/s. This is the first time derivative of PosD.
-    float posDown;                  // Down position state used in calculation of posDownRate
+    struct {
+        float pos;
+        float vel;
+        float acc;
+    } vertCompFiltState;
 
     // variables used by the pre-initialisation GPS checks
     struct Location gpsloc_prev;    // LLH location of previous GPS measurement