A spin valve element includes an antiferromagnetic layer, a pinned magnetic layer formed in contact with the antiferromagnetic layer so that the magnetization direction thereof is pinned by an exchange coupling magnetic field with the antiferromagnetic layer, a nonmagnetic conductive layer in contact with the pinned magnetic layer, and a free magnetic layer in contact with the nonmagnetic conductive layer. The free magnetic layer includes a nonmagnetic intermediate layer, and first and second free magnetic layers with the nonmagnetic intermediate layer provided therebetween, the second free magnetic layer is formed in contact with the nonmagnetic conductive layer, the first and second free magnetic layers are antiferromagnetically coupled with each other to bring both layers into a ferrimagnetic state, and either of the first and second free magnetic layers comprises a ferromagnetic insulating film. It is thus possible to increase the sensitivity to an external magnetic field, and suppress the occurrence of a shunt loss to increase the rate of change in magnetoresistance.