Performance-wise they are
not compatible -- only
physically compatible if you are to base your decision on PCPartPicker alone. You are spending too much money for features you can't use.
For example, though the i5-7400 can
physically fit on a Z270 motherboard, it is
not a good pairing both in price and performance. The CPU you selected is a locked (i.e., non-OC'able) CPU, while the Z270 mobo is intended for OC'ing. So, you are paying a $$$ premium for OC'ing which you can never even take advantage of.
The B250-chipset motherboard (which are non-OC'able) costs way less than the Z270-chipset mobos.
The i5-7400 (3.0GHz to 3.5GHz Tubo) and the i5-7500 (3.4GHz to 3.8GHz Turbo) has a difference of only $13.
RAM can also be improved. If you are set to pick a locked Intel CPU, it's best to get a 2400MHz speed for almost the same price as that is the maximum speed the setup can support. 16GB is recommended in todays games, but, opt for a 2x8GB to take advantage of dual-channel memory speeds.
The choice of the GPU depends on your monitor resolution/refresh rate, your current PSU quality, and the spatial clearance in your case.
Here's a suggested build (excluding the PSU you already have - assuming it's enough, as you did not mention its specs):
PCPartPicker part list /
Price breakdown by merchant
CPU: Intel - Core i5-7500 3.4GHz Quad-Core Processor (€193.90 @ Caseking)
Motherboard: MSI - B250M PRO-VDH Micro ATX LGA1151 Motherboard (€75.68 @ Amazon Deutschland)
Memory: Corsair - Vengeance LPX 16GB (2 x 8GB) DDR4-2400 Memory (€128.89 @ Amazon Deutschland)
Storage: Western Digital - Caviar Blue 1TB 3.5" 7200RPM Internal Hard Drive (€54.54 @ Mindfactory)
Video Card: Gigabyte - GeForce GTX 1060 6GB 6GB WINDFORCE OC 6G Video Card (€273.57 @ Amazon Deutschland)
Case: Zalman - T2 Plus MicroATX Mini Tower Case (€29.90 @ Caseking)
Total: €756.48
Prices include shipping, taxes, and discounts when available
Generated by PCPartPicker 2017-06-10 23:20 CEST+0200