There are two types of homing torpedo. The main differences between the two are the minimum speed the target has to be going for the torpedo to obtain a lock (the type V is more 'sensitive' than the type IV).
In a perfect world, this means the type V is 'better' because there are more ships it can home in on, and more situations where it will obtain a hit. But honestly, I see things differently.
I think the type IV is better:
-Higher minimum speed means it is less likely to accidentally lock on to you
-Less renown cost (type V is 800 renown
per torpedo 
)
-Obtained earlier in your career
The homing torps are neat, even if a little more accurate then they were in real life. I like having one in the stern tube of my VIIC to fire at pursuing destroyers. Since you don't really have to worry about aim, you can fire it while being at max firing depth (think its 25 meters) ideally while crash diving.