An MTJ MRAM cell and its method of formation are described. The cell includes a composite free layer having the general form (Ni88Fe12)1-xCo100x—Ni92Fe8 with x between 0.05 and 0.1 that provides low magnetization and negative magnetostriction. The magnetostriction can be tuned to a low value by a multilayer capping layer that includes a positive magnetostriction layer of NiFeHf(15%). When this cell forms an MRAM array, it contributes to a TMR≧26%, a TMR/Rp—cov≧15.5 and a high AQF (array quality factor) for write operations.