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Globally, the building sector consumes approximately 60% of the total energy usage, while the energy consumption of residential buildings lies between 20% to 40%. The majority of this energy is operational energy, which comes mainly from the heating and cooling of houses. Innovative and cost-effective insulation materials have the potential to reduce the operational energy requirements and can therefore make the buildings more energy efficient. In this study, three commonly available insulation materials were experimentally evaluated for a case study of residential buildings, located in a cold region of Pakistan. Glass wool, extruded polystyrene, and polyethylene were used, as insulation materials, for monitoring the case study building performance. Thermal data were collected for 21 days in the year 2019 using a Testo Saveries System and were then used for analyzing the thermal performance of each of the three types of insulation materials. Other relevant data including the cost of insulation materials, thickness, ease of application, design life, and fire resistance of the selected insulation materials were obtained for broader (based on the scorecard) analysis based on a multi-weighted decision model. It was concluded that Polyethylene was the most economical insulation material amongst the others, which also showed the best thermal performance. Polyethylene was also found to be the best insulation material for the case study building based on a multi-weighted decision model and, hence, is recommended for application in buildings around cold regions of Pakistan.