Mortar that is used for fireplaces is typically called refractory mortar, and there are more types of it than you might think. Some are specifically used for binding stone to the fireplace, while others are used to insulate the fireplace framework, which is typically constructed of wood, from the heat of the fire. The decorative exterior of the fireplace that is not subjected to heat from the fire can utilise standard mortar without problems.
Standard refractory mortar is used for high-heat situations such as the actual firebox of the fireplace. The mortar is available in two colours, grey or beige, to complement fireplace stonework. Gray refractory mortar typically is used for applications where decoration is not a concern, while beige is used for home fireplaces. Standard refractory mortar must be mixed with water prior to application.
Pre-Mixed Refractory Mortar
Pre-mixed refractory mortar is ready to use right out of the bucket. It is already mixed to the correct consistency, and can be used to affix stone to the backing walls of the fireplace as well as to mortar between the stones. Although much more convenient than standard refractory mortar, it is also much more expensive.
Insulating mortar is a dry mix mortar that is applied to cement fireplace boards to deflect heat from the wood framing behind the cement board. Insulating mortar can be used to set fire stones or bricks against the concrete board, but must be applied thickly to retain its heat-insulating properties. Insulating mortar can be used between stones and firebricks, but is only available in grey, generally making it unsuitable for decorative purposes.
Type S Mortar
Type S mortar is not a type of refractory mortar, and as such, should not be used within the firebox. That being said, however, it is acceptable and more affordable to use type S mortar for the decorative stonework or brickwork around the firebox. Additionally, when constructing fireplace facings with heavy decorative stone, type S mortar is stronger than refractory mortar, helping to prevent weight-stress cracks after the mortar has cured.