Based on the life cycle cost analysis, a thermal performance optimization model of building envelope was developed for the energy-saving renovation of existing residential buildings. The calculation formulas of the economic insulation layer thickness of the roof, external wall and floor over the basement were obtained simultaneously, and the optimal relationship of thermal performance among building envelope units was proposed; that is, the equivalent U-value of each opaque building envelope units should be equal. Moreover, the calculation methods of ultimate and optimum energy saving ratio were put forward. For a case study existing residential building in Beijing, compared to the energy-saving renovation scenarios determined by the limit value method (LVM), the saving ratio of insulation material of those determined by the optimization model ranges from 0.53% to 73.59%; and the saving ratio of insulation investment ranges from 0.21% to 64.93% when the building envelope energy saving ratio been taken the same value and changing from 0.65 to 0.85. The limit U-value of envelopes prescribed by Design Standard for Energy Efficiency of Residential Buildings in Beijing (DB11/891–2012) cannot meet the optimal relationship. Therefore, energy-saving renovation scenario determined by LVM cannot obtain the best economic benefit. The ultimate and optimum energy saving ratio achieved are inversely proportional to the U-value of windows. However, improving the performance of windows cannot necessarily achieve the best economic benefit. It is necessary to consider the technical advancement and economic rationality to choose the windows.