A STT-RAM MTJ that minimizes spin-transfer magnetization switching current (Jc) while achieving a high dR/R is disclosed. The MTJ has a MgO tunnel barrier formed by natural oxidation to achieve a low RA, and a CoFeB/FeSiO/CoFeB composite free layer with a middle nanocurrent channel layer to minimize Jc0. There is a thin Ru capping layer for a spin scattering effect. The reference layer has a shape anisotropy and Hc substantially greater than that of the free layer to establish a “self-pinned” state. The free layer, capping layer and hard mask are formed in an upper section of a nanopillar that has an area substantially less than a lower pedestal section which includes a bottom electrode, reference layer, seed layer, and tunnel barrier layer. The reference layer is comprised of an enhanced damping constant material that may be an insertion layer, and the free layer has a low damping constant.