diff --git a/runelite-client/src/main/java/net/runelite/client/ui/overlay/OverlayRenderer.java b/runelite-client/src/main/java/net/runelite/client/ui/overlay/OverlayRenderer.java
index c552ac9de4..421b5d1dca 100644
--- a/runelite-client/src/main/java/net/runelite/client/ui/overlay/OverlayRenderer.java
+++ b/runelite-client/src/main/java/net/runelite/client/ui/overlay/OverlayRenderer.java
@@ -460,53 +460,83 @@ public class OverlayRenderer extends MouseAdapter implements KeyListener
 
 		if (inOverlayResizingMode)
 		{
-			final Rectangle r = currentManagedBounds;
+			final int left = p.x - currentManagedBounds.x; // Distance (in pixels) from the left edge of the bounds
+			final int top = p.y - currentManagedBounds.y;  // Distance (in pixels) from the top edge of the bounds
+			final int originalX = currentManagedBounds.x;
+			final int originalY = currentManagedBounds.y;
+			int x = originalX;
+			int y = originalY;
+			int width = currentManagedBounds.width;
+			int height = currentManagedBounds.height;
 
-			final int dx = p.x - r.x;
-			final int dy = p.y - r.y;
 			switch (clientUI.getCurrentCursor().getType())
 			{
 				case Cursor.N_RESIZE_CURSOR:
-					int height = r.height - dy;
-					r.setRect(r.x, r.y + dy, r.width, height);
+					y += top;
+					height -= top;
 					break;
 				case Cursor.NW_RESIZE_CURSOR:
-					int width = r.width - dx;
-					height = r.height - dy;
-					r.setRect(r.x + dx, r.y + dy, width, height);
+					x += left;
+					y += top;
+					width -= left;
+					height -= top;
 					break;
 				case Cursor.W_RESIZE_CURSOR:
-					width = r.width - dx;
-					r.setRect(r.x + dx, r.y, width, r.height);
+					x += left;
+					width -= left;
 					break;
 				case Cursor.SW_RESIZE_CURSOR:
-					width = r.width - dx;
-					height = dy;
-					r.setRect(r.x + dx, r.y, width, height);
+					x += left;
+					width -= left;
+					height = top;
 					break;
 				case Cursor.S_RESIZE_CURSOR:
-					height = dy;
-					r.setRect(r.x, r.y, r.width, height);
+					height = top;
 					break;
 				case Cursor.SE_RESIZE_CURSOR:
-					width = dx;
-					height = dy;
-					r.setRect(r.x, r.y, width, height);
+					width = left;
+					height = top;
 					break;
 				case Cursor.E_RESIZE_CURSOR:
-					width = dx;
-					r.setRect(r.x, r.y, width, r.height);
+					width = left;
 					break;
 				case Cursor.NE_RESIZE_CURSOR:
-					width = dx;
-					height = r.height - dy;
-					r.setRect(r.x, r.y + dy, width, height);
+					y += top;
+					width = left;
+					height -= top;
 					break;
 				default:
 					// center
 			}
 
-			currentManagedOverlay.setPreferredSize(new Dimension(Math.max(MIN_OVERLAY_SIZE, currentManagedBounds.width), Math.max(MIN_OVERLAY_SIZE, currentManagedBounds.height)));
+			final int widthOverflow = Math.max(0, MIN_OVERLAY_SIZE - width);
+			final int heightOverflow = Math.max(0, MIN_OVERLAY_SIZE - height);
+			final int dx = x - originalX;
+			final int dy = y - originalY;
+
+			// If this resize operation would cause the dimensions to go below the minimum width/height, reset the
+			// dimensions and adjust the x/y position accordingly as needed
+			if (widthOverflow > 0)
+			{
+				width = MIN_OVERLAY_SIZE;
+
+				if (dx > 0)
+				{
+					x -= widthOverflow;
+				}
+			}
+			if (heightOverflow > 0)
+			{
+				height = MIN_OVERLAY_SIZE;
+
+				if (dy > 0)
+				{
+					y -= heightOverflow;
+				}
+			}
+
+			currentManagedBounds.setRect(x, y, width, height);
+			currentManagedOverlay.setPreferredSize(new Dimension(currentManagedBounds.width, currentManagedBounds.height));
 
 			if (currentManagedOverlay.getPreferredLocation() != null)
 			{