You're right to be suspicious. A temporary contract can cause insecurity, inequality and low status, and you'll have difficulties getting any loans or a mortgage. New teachers are sometimes discriminated against just because they're new to the profession - and that's terrible. Many unions have said so too.
Schools should only be giving temporary contracts to someone who's passed induction, if they're worried about their rolls dropping, or if the post is covering maternity leave. Schools that give temporary contracts as an insurance policy against you not being very good are to be treated with suspicion. You've passed induction, they've read your references, interviewed you, so they either think you're up to the job or not.
Don't accept a temporary position if you can get a permanent one. If you accept a temporary contract, do so with your eyes wide open: it says so much about a management style that may have many more unsavoury characteristics. Treat it as temporary and keep looking for a permanent position - and do so openly so that the head knows that you aren't going to hang around unless your role becomes permanent.