Should I withdraw application for senior post out of guilt?

[Millannie]

Sorry for the novel….

I have been in my current post for about 9 months. It’s similar to the role I had before I took a career break for my kids, but is a lower band than I was on 10 years ago. I took the job as a shoe-in to the same org I worked in previously, but actually really enjoy my job, and the flexibility is amazing.
I was taken on as temporary, but was told that my post would be rebanded and made permanent once they had established exactly what the post holder would need / be able to do.
2 weeks ago a colleague sent me a link to a senior post (5 bands above my current, but similar to what I have done in the past) that was being advertised in another team. This is a temporary, 12 month post. The closing date was the next day, so I quickly put together an application, and to my surprise I have been invited to interview next week.
My dilemma is that my current boss then excitedly told me this week that my post has been rebanded (to the same as I was on 10 years ago), and will be made permanent.
I really enjoy my current post, but feel that I am capable, and have the experience, to do much more.
I get on really well with my boss, and the rest of my team, and I really feel like I’d be letting her down if I took the new job, especially after she has got my current post put up a band. Part of me thinks I should withdraw my application and stick with the permanent post, rather than risk it with the higher band temporary post. Especially as my current boss is really great at giving me time to build my skills and knowledge, and work towards qualifications that could help me get an even better role in a couple of years time.
There is a real chance that my current boss will see me if I attend the interview, so I’m worried that if she sees me interviewing she might not be so happy to give me the permanent role, if I don’t get the new temp post, as she’ll be worried that I’m looking to leave the post as soon as another higher banded post comes up.
My DH thinks I’d be crazy not to go for it (it would add about £15k to my salary).
So, AIBU to withdraw my application out of guilt and fear of another temporary post?
TIA

Thanks everyone. I decided to be honest with my boss and explained the whole situation. She was very nice about everything, and said I should do what is best for me. She did, however, advised me to speak to a member of our team that has previously worked in the team I would be joining. Seems they have an high turnover - and for good reason - and it’s doubtful that I’d be kept on past the 12 month contract, because the project is going nowhere!
So, I have withdrawn my application, and will be happily taking the permanent role in my current team.

You are insane if you don't go for it! Definitely apply and if you get it you've got a decision to make but:

It's more senior
It's more money
It's what you've been doing before

why wouldn't you do it?

Managers would definitely NOT expect to be told that staff have applied for another role - internal or external - in my organisation.
In fact, if a hiring manager let any applicants’ details slip, they’d be in very hot water!
I guess everywhere is different. I was just worried that I’d bump into my boss and have to explain what I’m doing in the office, as I work 99% from home.

But op hasn't decided that she'd like to stay where she is at all? That's the whole point of her post!
(And tbh I think she would be mad to)

Op if she's told you your current job has been rebanded and made permanent she can't really go back on it just because you then apply for another role - usually re-banding takes a lot of work and evidence and its for the role, not the person -
and if she does try to out of spite then she's not the lovely person you think she is!

Go for the interview, if she finds out say you applied before the re-banding and decided to give it a go just for interview experience because you had been out of the workplace. Then if you get it make a decision then but do it on what's best for you not out of misplaced guilt! She might be applying for jobs herself or go on maternity/ career break and then you'll be stuck in a job you stayed in out of loyalty to someone who's not there anymore herself!

At the end of the day the vast majority of us go to work for the money, anyone begrudging you taking a job that pays significantly more is just being ridiculous.