diff --git a/homeassistant/components/sensor/mqtt.py b/homeassistant/components/sensor/mqtt.py
index fadf171d15b..c3cc9e3003f 100644
--- a/homeassistant/components/sensor/mqtt.py
+++ b/homeassistant/components/sensor/mqtt.py
@@ -60,7 +60,7 @@ class MqttSensor(Entity):
             """A new MQTT message has been received."""
             if value_template is not None:
                 payload = value_template.render_with_possible_json_value(
-                    payload)
+                    payload, self._state)
             self._state = payload
             self.update_ha_state()
 
diff --git a/homeassistant/helpers/template.py b/homeassistant/helpers/template.py
index 03029c369e6..c67f4e62665 100644
--- a/homeassistant/helpers/template.py
+++ b/homeassistant/helpers/template.py
@@ -402,7 +402,7 @@ class TemplateEnvironment(ImmutableSandboxedEnvironment):
         """Test if callback is safe."""
         return isinstance(obj, AllStates) or super().is_safe_callable(obj)
 
-ENV = TemplateEnvironment()
+ENV = TemplateEnvironment(undefined=jinja2.StrictUndefined)
 ENV.filters['round'] = forgiving_round
 ENV.filters['multiply'] = multiply
 ENV.filters['timestamp_custom'] = timestamp_custom