A magnetic tunnel junction (MTJ) is disclosed wherein first and second interfaces of a free layer (FL) with a first metal oxide (Hk enhancing layer) and second metal oxide (tunnel barrier), respectively, produce perpendicular magnetic anisotropy (PMA) to increase thermal stability. In some embodiments, a capping layer that is a conductive metal nitride such as MoN contacts an opposite surface of the Hk enhancing layer with respect to the first interface to reduce interdiffusion of oxygen and nitrogen compared with a TiN capping layer and maintain an acceptable resistance×area (RA) product. In other embodiments, the capping layer may comprise an insulating nitride such as AlN that is alloyed with a conductive metal to minimize RA. Furthermore, a metallic buffer layer may be inserted between the capping layer and Hk enhancing layer. As a result, electrical shorts are reduced and the magnetoresistive ratio is increased.