The present invention discloses a low-cost thermal insulation building material and a preparation method thereof, and the low-cost thermal insulation building material comprises foaming cement, vermiculite, kaolin, calcium acetate, calcium silicate, ferrous sulfate, magnesium sulfate heptahydrate, activated carbon, fly ash, a retarder and a superplasticizer. The low-cost thermal insulation building material is prepared from the formulated components by crushing, mixing, reacting at low temperature and moulding. The prepared building material is distributed with a very large number of tiny pores, has extremely strong thermal insulation properties, has a strong structure, has waterproof and heat insulation performances, has low cost, and is suitable for a wide range of promotion.