This paper proposes a fast multigrid algorithm to simulate the non-linear motion of ships in both intact and damaged conditions. The simulations of ship motions in waves are known to require much time to calculate due to the strong non-linear interactions between ship and waves. To improve the calculation efficiency while retaining the accuracy, a prediction-correction strategy was designed to accelerate the simulation through three sets of locally refined meshes. The flow field was first estimated in a coarse mesh and then mapped to a locally refine mesh for further higher-fidelity corrections. A partitioned radial basis function (PRBF) method is proposed to interpolate and reconstruct the flow field for the refined mesh. A new two-phase flow solver was developed with a fast multigrid algorithm based on the Reynolds-averaged Navier–Stokes equations (RANSE). The new solver was applied to study the non-linear behavior of a damaged ship in beam waves and the effect of damaged compartments on ship rolling motion. Validation against the solution with the original method of single set meshes and experimental data indicates that the proposed algorithm yields satisfactory results while saving 30–40% of the computational time.