The invention discloses a capacitor film with low density polyethylene as substrate and a preparation method thereof. The capacitor film comprises the following raw materials by weight: 50-55 parts of LDPE (low density polyethylene), 20-25 parts of LLDPE (linear low density polyethylene), 10-15 parts of homo-polymer, 3-5 parts of epoxy linseed oil, 2-3 parts of polyvinyl alcohol, 1-2 parts of aluminum hydroxide, 1-2 parts of polyisobutylene, 8-12 parts of diatomite, 1-2 parts of ferrocene, 0.8-1.2 parts of poly-4-methyl-1-pentene, 5-10 parts of calcium carbonate, 2-4 parts of hydrotalcite, 1.3-1.8 parts of zinc dialkyl dithiophosphate, 0.4-0.6 part of phthalic acid ester, 0.4-0.7 part of smoke sheet rubber, 1-3 parts of zinc stearate and 0.9-1.3 parts of modified wood ash. The invention mainly adopts low density polyethylene assisted with linear low density polyethylene; and various accessories and additives are subjected to mixing and extrusion, blown film sizing and cutting to prepare the capacitor film. The preparation method is simple; and diatomite, hydrotalcite and modified wood ash are added into the raw materials at the same time to enhance barrier property and air tightness of the film; besides, the capacitor film has characteristics of good pressure resistance, impact resistance, high heat sealing strength, and good heat sealing performance.