1. The CPU doesn't need that cooler.
2. Low cost watercoolers are terrible. Always go for air in these budgets. Watercoolers are only really forth it of full loops
3.Does it have to be matx?
Here is a better build.
PCPartPicker part list /
Price breakdown by merchant
CPU: Intel Core i5-6500 3.2GHz Quad-Core Processor ($265.00 @ Centre Com)
CPU Cooler: Cooler Master Hyper 212 EVO 82.9 CFM Sleeve Bearing CPU Cooler ($65.00 @ CPL Online)
Motherboard: MSI B150M MORTAR Micro ATX LGA1151 Motherboard ($132.00 @ Umart)
Memory: Kingston HyperX Fury Black 16GB (2 x 8GB) DDR4-2133 Memory ($105.00 @ CPL Online)
Storage: Samsung 850 EVO-Series 250GB 2.5" Solid State Drive ($129.00 @ PLE Computers)
Storage: Western Digital Caviar Blue 1TB 3.5" 7200RPM Internal Hard Drive ($65.00 @ IJK)
Video Card: MSI GeForce GTX 1060 6GB 6GB ARMOR OC Video Card ($439.00 @ Scorptec)
Case: NZXT S340 (White) ATX Mid Tower Case ($109.00 @ PLE Computers)
Power Supply: Corsair RMx 650W 80+ Gold Certified Fully-Modular ATX Power Supply ($159.50 @ Skycomp Technology)
Operating System: Microsoft Windows 10 Home Full 32/64-bit ($153.00 @ IJK)
Total: $1621.50
Prices include shipping, taxes, and discounts when available
Generated by PCPartPicker 2016-10-02 21:39 AEDT+1100
You don't have to have any cooler, an use the stock intel one.
Gives you a better GPU.
And is completely balck and white