The invention discloses insulating mortar for buildings and a preparation method thereof, relating to the technical field of novel building materials. The mortar is prepared from the following raw materials: carbide slag, boric sludge, modified shale pottery sand, Zuoyun clay, sepiolite fibers, microcline powder, analcite powder, calcium nitrite, polydimethylsiloxane, dimethyl sulfoxide, woody sodium carbonate, dehydroacetic acid, a polyacrylate co-polymerized emulsion, a waterproof agent, an anti-freezing agent, a thickening time control agent and an air entraining agent. The preparation method comprises the following step of stirring, mixing and grinding raw materials. The insulating mortar for buildings is simple and convenient in preparation method, has the characteristics of being high in compressive strength, good in impact toughness and excellent in waterproof and anti-freezing property, is insulative and soundproof, weather-resistant and resistant to weather, long in service life and wide in application occasion, the safe reliability of the insulating mortar structural body for buildings is improved greatly, and the mortar is suitable for being popularized and applied.