Many fireplace masons are not familiar with refractory mortar, or they confuse the product with fireclay mortar. Masonry fireboxes are often laid in ordinary portland cement mortar, sometimes with a little extra cement or some fireclay added to make the mixture “fireclay mortar.”
This approach is not surprising since the major building codes have been unclear, inconsistent, or silent on the subject. The ICC codes – recently adopted in many states –require refractory mortar for the construction of fireboxes, smoke chambers, and flue linings, but a short while ago only the NFPA 211 code called for “refractory mortar (ASTM C199, medium duty).” The BOCA code required “medium-duty fireclay mortar,” the UBC just required that the “joints in firebrick shall not exceed ¼ in.,” and the CABO One and Two Family Dwelling Code did not specify the type of mortar or size of joint to be used.
The problem with using ordinary mortar is that portland cement can't take the heat. Oddly, portland cement retains its strength up to fairly high temperatures, but deteriorates as it cools down through about 600° F. Eventually all that is left of the mortar is the sand and fireclay, with no cement binder. The mortar has no strength and easily falls out of the joints, especially if they are wide.
Refractory mortar, on the other hand, is made with high temperature cements and carefully selected aggregates that don't expand and tear the mortar apart when heated. The International Residential Code (IRC) and International Building Code (IBC), which were recently adopted in nearly all states, require that fireboxes, smoke chambers, and flue liners be laid with refractory mortar conforming to ASTM C 199.
Admittedly, fireplaces are not often used to heat with these days. Fireboxes laid in ordinary portland cement mortar may last for years if they are only fired up at Thanksgiving and Christmas. But, never mind that refractory mortar performs better, looks better, and is easier to use, there is another powerful reason to use the product – it's required by code.
There are basically two kinds of refractory mortar conforming to ASTM C 199 and permitted by code. Hydraulic-setting mortar sets up, or cures, like portland-based mortars. Premixed or air-drying mortar comes ready to use in pails about the consistency of a drywall compound, and may be thinned with a little water.
Hydraulic-setting refractory mortar is the best all-around choice. It can be used to lay the firebrick, set or parge the throat and smoke chamber, and set clay flue liners. It has the workability of ordinary portland-based mortar and can be made almost any shade using ordinary mortar color.
This type is the only one that should be used to set clay flue liners. Once it has cured, hydraulic-setting mortar becomes water insoluble and acid resistant. Premixed mortar dissolves in water even after dried and could wash out if the flue gets wet. Because hydraulic refractory mortar is acid resistant and water insoluble, it's the only product for any clay flue that vents a gas or oil appliance.
Hydraulic-setting mortar is easier to ship and store than premixed. It comes dry in pails or bags and is not subject to separation, hardening, or freezing before it is used.
Hydraulic mortar works better in wet climates where the premixed product takes a long time to dry and sometimes leads to efflorescence.