Interactive multimodal surgical simulators are powerful tools that allow efficient and objective assessment of surgical skills. Bilateral Sagittal Split Osteotomy (BSSO) requires precise cutting of the mandible with a motorized saw that cannot afford a high margin of error. Surgeons rely on visual and haptic cues that are hard to train for through existing curricula without training directly on patients. In this paper, we present a new algorithm to achieve low-cost, precise sawing of the bone that is capable of providing realistic force feedback to the user at haptic rates (~1000Hz). Our method is centered around treating the bone surface as a level set that is evolved at interactive rates upon user's interaction with the virtual saw. The movement of the virtual saw itself is governed by a rigid body solver which is attached to the pose (6 degrees of freedom) of the haptic device via a mass-spring-damper which also supplies haptic force feedback. Our method allows parameterization of the erosion rate, saw speed, and bone density thus making it suitable to any material shaving application including dentistry (e.g., tooth milling) and a variety of surgical osteotomies.