An illustrative hydraulic fracturing simulation method includes: creating an initial mesh representation of a subterranean formation, the mesh including mesh nodes; determining one or more fracture paths in the formation; for each of the one or more fracture paths, displacing a subset of the mesh nodes into alignment with the fracture path; interpolating from displacements of the aligned mesh nodes to obtain displacements for each non-aligned mesh node in the mesh, thereby obtaining a deformed mesh representation of the formation; using the deformed mesh to construct a linear set of equations representing fracture creation and propagation caused by injection of a hydraulic fracturing fluid; deriving one or more fracture path extensions from the linear set of equations; and displaying the one or more fracture paths with the one or more fracture path extensions accurately representing the fracture propagation path. The interpolation may be performed using radial basis functions.