most people sew their binding to the front, trim away at the seam allowance, then flip and attach the binding to the back. having the extra makes that whole process easier.
i try to leave between 2" and 3" as a safety zone. if nothing else, it gives me the option of throwing on another border if i decide the quilt really needs one.
5" does sound a bit much if you aren't going to put it onto a frame for quilting.